David Warford

Author: David Warford

Achieve the value of an agile business

October 29, 2018October 29, 2018
by David Warford

The value of agility in business is clear, but to achieve this, you must take the right approach.

An agile business is able to anticipate market shifts and make operational changes quickly. It can create opportunities, change where appropriate, and deliver value to its customer faster. It’s a company that shares data through enterprise-wide systems integration. A major component of the agile business is modernized technology. This provides data visibility and analysis, which develops sharp reflexes and yields smart decisions across every functional area of the organization.

The people factor in an agile business

While technology plays a significant role, the systems you use are simply tools for building an agile company. They are not what drives agility. The drivers are your people and processes. Even the best technology can’t overcome a weak team and poor processes. A nail gun is faster than a hammer, but merely using it doesn’t make you a master carpenter.

Yes, this is a 180-degree change in thinking from just a few years ago when technology was the very foundation of business operations. At that time software was notoriously inflexible, which wasn’t a problem for standard processes. But every business has proprietary processes that traditional software solutions do not handle well, leaving them with few options.

When such business processes fall into the category of “must keep” a company faces the following choices:

Change the processes to fit the functionality of their current software
Customize their software so they can keep the processes as is
Execute the processes outside of their core systems

None of these options are optimal, yet until recently, companies have been forced to pick what they deem to be the lesser of the evils.

Process and agility

This requirement to make do with a less than optimal technology environment is no longer the case. Companies can now employ process-driven technology, an environment where technology is fit to the processes, rather than the opposite. This one advancement is giving companies the ability to establish and sustain competitive advantage.

The key to an agile business

The speed at which a company can change its processes to take advantage of shifts in the market is a measure of its agility. Companies that make the 180-degree turn, shifting theirs to a well-rounded environment maximizing people, processes, and technology, will not only be in a position to optimize processes today but will assure that they are agile enough to continue to drive the most value from them regardless of how or when the market shifts in the future. Today’s ERP software is ready. You need to ensure your people and process are ready as well.

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Business Transformation

Hiring a consultant? Don’t gamble

September 9, 2018October 19, 2018
by David Warford

Looking for a consultant you can trust is not easy. It was probably painful just to come to terms with the idea of hiring a consultant. Maybe you have accepted that your project is outside the scope of your internal knowledge base, or simply that you just can’t allow the time it will take to use your own people. Regardless, you are faced with a tough question: “How do I find a good consultant?” There is more content than anyone can possiblty read on the subject of choosing the right consultant. This post focuses on just one important part of this decision: to help you spot the good (and the bad) ones so your decision is one of strength, not a risky gamble.

Heart to Heart

Whatever you do or however you find them, collect a handful of prospective advisors and have a talk with them. A very serious and critical talk about who they are and how they work. Whatever project your organization has planned, it requires some level of change. Whether it is a small change or a full transformation, people (employees) are involved. I’m sure you have heard all the statistics about the low success rates of change and transformation projects (they average out at 30% –Standish , Gartner). It’s important to know more about what makes this person you may entrust the future of your company to tick, and if your clocks are synchronized. Also, you need someone with a strong history of successful projects under their belt. Try a question to them similar to the following;

How will you be any different then assigning one of my highly qualified internal employees to run the project?

If they answer by just selling you on their super-duper processes, abilities, success stories, awards received in foreign countries, etc…. I hope you hit the buzzer and say “Next”. Of course, do this all in your head – don’t be rude.

The bottom line is that you don’t need a sales job, you need help. The good consultant answers your question with more questions. They should be most concerned with your company than their sales process. They will help guide you through probing your organization’s problem and need for the project. You should actually get some real and usable advice from the conversation. If they have the confidence and passion to help you and the organization to be successful, they should not be afraid to give away advice. Willingly supplied advice vs. hem-hawing; I know which candidate I would prefer. The good ones, the genuine consultants are willing to walk away from your business if it isn’t the right fit, or if you take their advice and run on your own – or if all the organizations leadership does not support the project. They are there to help you, not scam a new high paying gig.

Teamwork

Bottom line: this project of yours needs to be successful and the statistical odds are stacked against you. The consultant’s experience is one of the primary reasons you are even thinking about using outside assistance. You need to know their success is your success and not just a pay check;

How likely is it that our project will be a success?” or more open ended, “How would you make our project a success?

If you get lost in the answer it may have been full of boil the ocean promises and/or full of pre-emptive excuses to cover possible future failure. Check their virtual briefcase. They probably only have one life vest which is only for themselves… hope you can swim. The better answer is honest and realistic. Does their answer sync with the hard truths that are specific to your organization or even yourself? I myself would like to think a consultant who is not afraid to tell me the truth is willing to “live & die” with me in our decision making during the project.

Risk Reduction

Your project plans to update or transform the business will entail a large amount of change by the people who run the business. Plan on the fact that up to 80% of the project issues experienced will be caused by people. Did your shoulders just slump over like mine? “Dagnabit! employees, co-workers, bosses & leadership“,… are you picturing the probable and painful political issues which come along with this change? Make sure you ask each consultant you interview what they can do help:

Tell me about your experience as a change agent? What can you do to help us reduce our risk Do you have a change management specialist in your company?

This answer is particularly vital. You should hear the consultant talk about the importance of recognizing this as a challenge for any organization. You should also hear something about the consultant’s ability to view the company with fresh eyes and work from a neutral position. This position allows them to state the hard facts and help with difficult decisions, something with which internal stakeholders may have difficulty in coming to terms. The right consultant will reduce the political sensitivities and at times take a bullet for you.

Successful change will be the most difficult part of any project. You want to hear stories about successful change. The consultant should, with confidence, share a story which failed. But they should follow up the failed story with the lessons learned. Everyone has fallen down and skinned their knee a few times, but from those experiences they learn how to not fall, or how not to skin their knee if they do fall.

Stay tuned for other conversations about finding the right consultant for your needs. Next time, I’ll discuss another key question to ask a potential consultant; one that I have seen cost companies a lot of time and money if not asked up front. Please sign up to receive a notification when we post so you don’t miss anything.

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Business Transformation

Does your consultant have an exit plan?

August 21, 2018October 19, 2018
by David Warford

In previous posts, I’ve been exploring some important things to consider as you go through the process of hiring a consultant for your ERP modernization or business transformation. I must admit, there are plenty of soul, and money, sucking vultures out there. But there are also some good consultants too. The consultants who are really more like advisors. The latter type truly want to, and can, make a tremendous difference for companies and individuals. They offer invaluable insight, keep their word about expectations, and don’t promise what they can’t deliver. Some are, dare I say it, even ethical.

When I started KnowledgePath Consulting, I wanted to make a difference, be honest, and be genuine. This is always a priority when working with my clients. I feel honored to help make a difference for a business and its future. Because I strive to be one of the good guys, I have put a lot of thought into what makes the difference between us and the vultures. And my late nights spent pondering the question, “What makes us different?” has become the topics of many of the posts we’ve shared with you here on the blog.

Many of these questions are also the best questions to ask your consultant candidates. But there is one question in particular that I haven’t addressed yet and want to make sure I cover now. Unfortunately, it comes from too many bad consultant experiences that I’ve witnessed when we are called in to rescue failing projects.

You may have had these questions about a consultant in the past:

When will they be done?
What is taking so long?
Oh, I thought they were a full-time employee here; what do they do again?
How can I get them out of here?

If you have not had these concerns arise, then it is because you did a good job developing the contract agreement regarding the “exit plan” up front. I have not seen this mentioned in very many articles on choosing a consultant, maybe because they are usually written by consultants. But I highly suggest asking this question during your discussions. It is as simple as:

**“What is your exit plan?“**

It may feel strange to ask about an exit plan before you have chosen a consultant. But the responses you receive should clearly give you a good gut feeling of which consultant to choose. Is there up-selling involved? Some level of a sales pitch? Or do you receive an immediate “yes, there is an exit plan” followed by generalities and a discussion filled with misdirection designed to make you feel comfortable even though they didn’t actually outline a plan. Again, as I’ve said in previous posts, the buzzer should go off (in your head, not out loud!).

As you ask your questions, listen for something to the effect of the consultant working themselves out of a job. They should give you an idea of their general exit plan, which of course all parties together will customize in more detail based on the project requirements and measures. If they are fully committed to you and your company’s success, they will be clear about what exit promises they can’t yet make and what they can. They understand a successful project sets the stage for a partnership to grow into more of a relationship from which future opportunities will flow their way.

Final Gut Check

As you review your notes after talking with each candidate, here are some points I suggest you pay particularly close attention to and comment in your notes when interviewing your consultants:

Does the consultant possess the right knowledge to support you and your project?
Do they seem transparent?
- Admit lack of knowledge where they don’t have it, or other ‘weaknesses’?
- Give you ideas and free advise willingly?
- Come across as a genuine business partner?
Will the consultant roll up their sleeves and work with the employees within your organization?
Does the consultant sound like they will be a facilitator or a dictator? Obviously, the preference is for the former and hopefully a teacher/coach.
How good a listener was the consultant?
Did they come into the meeting already ‘knowing’ everything, or did they come in demonstrating that they had done their research but knew they had more to learn?
Do you feel they are willing to break the norms… question the status quo?

If the first group of candidates doesn’t meet your gut check, it is okay to find new candidates. Don’t be tempted to treat this process as if you’re hiring a temporary employee which can be replaced at any time. Although it is true that it is a temporary hire of sorts, it is not a seasonal position. This one really matters. You hold the cards, but it does not mean you need to hold on a pair. Go for the full house. Or better. Your organization’s success depends on a quality find.

You will know you have found the right fit for your needs when you find the royal flush of advisors. In that case, you may find it very difficult to want them to leave, and maybe they shouldn’t if their value is so significant. In that case, you may find yourself looking for an exit plan followed by a retainer. But that’s down the road. Work on getting the royal flush first!

Want to back to part 1 and part 2 of this topic. Just follow the links.

Business Transformation

Managing ERP expectations: The story of the hammering pipe…

February 27, 2018October 19, 2018
by David Warford

Moving to a digital ERP environment is hard. It takes effort and time, but the effort pays off. Typically, our blog posts are dedicated to helping you go through the process successfully. This week, here’s a little analogy to help you keep the big picture in mind and focus on why it’s worth all that effort to move into a better system.

You are hired to build fences. The employer will supply the materials and the tools for the job. On the first day, you find your planks, all the nails you’ll need, and a three-pound pipe wrench.

For the first few days, the work is slow. It takes some time to learn how to drive in nails accurately with the back side of the wrench. Bent nails take a great amount of effort to remove as you use the vise side of the wrench to grab the nail and pull. The weight of the wrench makes work cumbersome and tiring. And hitting your thumb with the wrench? Very painful.

After several months, though, you become expertly accustomed to driving nails with the wrench. You’ve found ways to work around the shortcomings of an awkward tool, and your employer observes that your production has improved from 80 boards per day to 100.

One day, you come to work and instead of the pipe wrench, your employer has brought you a new tool to try – a claw hammer. You don’t understand the hammer, and no one has explained how to use it. It barely weighs a pound; how will it generate enough force to drive a nail? Where is the device to pull bent nails? Your boss insists that this is the tool of the future.

You try it for the first week, and your production falls back to 90 boards per day. You’re having trouble getting used to the lightweight nature of the hammer and seem to be missing your mark more often. You hate how clumsy you feel; you especially hate that you’re hitting your fingers more often again. You start to yearn for the familiar comfort of the pipe wrench. Ignoring the early problems, you focus on a few positive gains. You have discovered that the claw grabs bent nails more effectively and extracts them with less effort. Your arm isn’t as tired swinging the hammer by the end of the day. And, in time, you’ve adapted to the new weight, and your accuracy and speed have increased. Your production reaches 130 boards per day.

This is how any ERP transformation will feel for your workforce. It demonstrates why it is important to set everyone’s expectations early. Your legacy system has become a bulky tool. Your staff can get their jobs done, but it often requires brute force to work information through the system. You will have employees who will prefer to keep the legacy system not because it’s perfect but because they understand how to work around the drawbacks in order to meet production goals.

Learning the nuances of a new tool can be frustrating to employees who don’t want to see their production tail off under any circumstances. In addition, they might focus on the problems that don’t go away – “nails” still get bent and “thumbs” occasionally get hit.

Manage Expectations

I will leave you with two thoughts to help manage expectations throughout your project. First, help your workforce understand it is part of the process to hit a temporary valley while everyone works through the learning curve of a new ERP, but you will work to flatten this curve. Secondly, communicate that the new ERP will help minimize frustration as well as maximize productivity and agility, so there will be fewer big changes in the future. Small changes will become the norm, and your workforce will no longer live in fear of the next new tool smashing their thumbs.

Business Transformation

Are requirements enough?

February 26, 2018October 19, 2018
by David Warford

The value of process mapping before an ERP purchase

In rare situations, a company can successfully choose an Enterprise Resource Planning (ERP) system on technical requirements alone. However, for most companies, the decision to incorporate a new ERP into an organization should be a piece of a larger plan that includes process mapping – it shoudn’t be the lone goal.

In a previous post, we referred to companies who, unintentionally, “bought the demo”, where several features of a new ERP resonated with an organization’s current processes, but the new system did not solve many existing problems.

When an organization decides that their ERP system is no longer keeping up with the company’s ability to execute its goals, this becomes an opportunity to take a full-scale look at the business. Think of it as the difference between taking your car in for an oil change and going in for a tune-up. An oil change is a maintenance activity to make sure everything can run smoothly, similar to authorizing a software update for your current ERP. With a tune-up – which occurs far less frequently – more systems are checked for operating efficiency.

An ERP implementation isn’t solely about making sure information flows through your organization properly. It’s also about making sure that production flows efficiently and positioning the company to work from a place of agility – which translates to a place of strength.

Take the time to do it right

Take the time to map your current processes. What are the steps that you have to take from start to finish for order entry through order fulfillment; from product conception to marketable item; from prospect to customer? How does information flow through those processes, and how do your employees interact with it?

Discuss the pain points that come from those processes with your workforce. KnowledgePath consultants have witnessed many a-ha moments with our clients during such discussions. Often, many of the “normal” tasks employees perform are the result of work-around solutions to your current ERP. They’re not trying to take five steps to perform a simple task – their current tool has boxed them into spending fifteen minutes to do what feels like should only take five.

The benefits of this exercise – while time-consuming – offer a large return on investment toward understanding the inner workings of your organization. Regarding the primary objective of securing your next ERP, you will begin developing a thorough list of product requirements you need to see from ERP vendors, which increases the chances of you choosing the best system for your needs the first time.

Identify important gaps

You can identify the information gaps in your current system. “I would like to do Process A, but without Information B that seems impossible.” In the real world, that can sound more like, “When I need to drop a rush order into production, I would like to be able to rearrange the schedule with as little impact to other deadlines as possible. Currently, I use my best guess based on experience, but a scenario analysis tool would make the decisions go faster with fewer errors.”

Mapping your processes is also an opportunity to help minimize issues associated with change management. A new system will be simultaneously exciting and stressful. If you’ve involved your front-line employees in the process of identifying your needs, then you have given them a voice in the process and a greater sense of buy-in.

Finally, if this exercise seems logical but the thought of going through a digital transformation is intimidating, then consider this: what I have described above is a big part of a successful digital transformation. Digital transformation is simply moving away from unnecessary manual and paper-based processes. Mapping out what you do now will allow you to step into a better, faster, and more agile method of doing business, and that will make you more competitive into the future.

Business Transformation

What exactly is Digital Transformation?

February 20, 2018October 19, 2018
by David Warford

…and does it really apply to me?

Companies replace or upgrade ERP and other business systems for a number of reasons all the time. But for the past few years, new terminology has been sending waves of fear and wreaking havoc upon CEO’s sense of order. One in particular is Digital Transformation. This post should help clarify what it is and help bring the terror level back down.

Digital Transformation sounds big. A full overhaul of unknown computer technology invading every facet of the company comes to mind. You may envision everything taken over by computers. What was once just science fiction is about to materialize throughout your very own workplace. The elements that once made your company unique reduced to a line of code somewhere in the system.

It’s not like that.

First things first, digital simply means “in an electronic system instead of on paper.” Basically, it is the elimination of unnecessary manual work.

A quick history of ERP system functionality

In the days when ERP came to the forefront, functionality in business systems grew at a manageable pace. Systems were upgraded much more often than they are today. Upgrades were less challenging because the systems were not all that pervasive to the overall functionality of the company. In the meantime, the basic technology behind the functionality began to expand. Since Y2K, basic computing power and capability has grown exponentially. Business system developers began to exploit what new computer power allowed them to do for both processing speed and user interaction. Because of this new power, upgrades grew so pervasive that changes became more traumatic. This was not only because they were touching more areas of the company, but because they ultimately still used the original technology, and realistically, this technology was no longer able to keep up. At the same time, business was demanding a change, something that first took hold when automakers forced companies to go to EDI, insisting they would not work with companies unless they could transact with them digitally.

Today, ERP and other business systems no longer manage just accounting and planning- they touch everything. A well implemented business system should impact nearly all areas of the business, but this is good because it allows streamlined access to information.

The opportunity you have with digital transformation is to move the entire enterprise forward through a change to a powerful and integrated system. The potential for improved profit, market growth, and customer satisfaction is all in play. The difference today in our digital world, is that this is not only a change in what the system does. It is also how the user is able to do it.

Now, about here you are probably wondering how this post is supposed to lower your fear level of a transformation like this. So, consider these three points.

First, any ERP replacement or even any business system replacement at all is now digital. So take digital out of the panic list because…

Secondly, we already live in a digital world, so extending that into our daily business lives isn’t as frightening as it feels. Think of ordering Starbucks on your phone. For many it is second nature, but it would have taken much more effort just 5 years ago and was unthinkable 10 years ago. Now think of business tasks in the same way. You can create a report, and it will integrate a terabyte of data in minutes with digital technology, whereas it might have taken a day or even a week of combining spreadsheets to get a comparable result.

Finally, the transformation doesn’t have to be done all at once. Many companies will have you in panic mode immediately by discussing the enormity of the project. Digital Transformation can (and usually should) be done incrementally as any ERP replacement would be done. Just make sure you start with a solid base of the right due diligence up front.

Set the project up the right way

Develop your business case and roadmap. Create the vision. Use this base to find the right software to fit your needs. Then you can take small steps toward a bigger transformation at the level of change your company can manage. Using this well-defined roadmap, you will be able to grow and adapt over time with the same system.

In the end, Digital Transformation is really no different from past changes you have made as a company, except these changes will last longer, be adapted to faster and better, and provide more value than you have probably become accustomed to. If you think about Digital Transformation as a business system change that simply offers better options as you need them, your expectations will be much more in keeping with reality.

Business Transformation

ERP transformation is about more than technology

January 13, 2018October 19, 2018
by David Warford

If you’re considering replacing your Enterprise Resource Planning ( ERP ) system or applying a major upgrade, take a step back and look this project as a part of a larger business transformation.

One of the major reasons organizations replace their current ERP is because the legacy system is not holding its value. It can be a hard pill to swallow, but the reality is that what was cutting edge in 2008 is flat out antiquated in 2018. Employees are creating workarounds in order to do their jobs because their ERP was suited to a bygone business environment. Systems on the market today have better functionality that allow businesses to run leaner and more efficiently.

Improving the technology at your disposal is only part of the solution. Even if you can’t go through a full business transformation at this time, replacing your ERP is an ideal time to take a close look at your business practices and your personnel. It will make the replacement more successful and lead to additional improvements for overall company value.

Map your processes

Learn what you do and why you do it. Define your starting point by taking the time to have your people walk through all the steps and decision points that go into their day-to-day operations. You need to do this anyway in order to help you identify requirements for the next ERP, but the exercise creates the added value of documenting processes that have only been communicated through tribal knowledge. People from different departments gain a new perspective on how their work affects someone downstream. It is not uncommon to hear something such as “I didn’t know you did all that” between two people whose tasks were side-by-side in the process flow. While it would be natural to assume everyone talks with each other, the reality is that most people will simply do what they have to do to get their jobs done without discussing the bigger picture with coworkers.

Identify the pain points

Once you’ve identified the current state of your processes, let your workforce speak candidly about where the established process and technology are holding them back. These are the pain points of their jobs. Assembling this list will allow you to prioritize what needs to be fixed. Some of the problems are not technological; therefore, a new ERP won’t fix them. However, the awareness of the issues that are technology-based gives you the ability to shop more efficiently for the ERP that is best-suited to your needs. This also give you a list of needed improvements around the non-technical process flows.

Imagine the future

Don’t settle for a system that replicates what you already do. If you’ve just gone through the exercise of identifying the flaws in your current system, the last thing you’ll want is to purchase something that reaps no real value to the company. It’s a surprisingly common mistake to make because people lean toward technology in their comfort zone no matter how unhelpful that is. You likely can’t fix all of the pain points with a new system, but it will be better to set improvement goals off of the deficiencies you can fix with a new ERP. Maintain that focus to help your team look for the established gains you’re hoping to achieve and less on negotiating the learning curve that comes with utilizing new tools.

Assess your people

Even if it goes smoothly, the implementation of a new ERP will be disruptive. Focus on the opportunity to reset your succession planning. Before the project even starts, you’ll need to determine who your subject matter experts are in order to work on requirements gathering and process mapping. This is the time to evaluate which of those people are in sole possession of critical knowledge and how vulnerable you are if any of them leave. As training and implementation begins, you need to be ready to recognize there will be employees currently buried on the company depth chart who are ready to take a leadership role because they have the aptitude and willingness to utilize the new system to its fullest potential. There will be others who will need more coaching to make a successful transition. It is important to identify these people as well. Success of a new system is dependent on success of the individual to use it correctly.

Strongly consider bringing in an outside consultant

An experienced consultant can guide your company through these early processes. They can lead your people through the mapping process and compile the findings into a coherent Request For Proposal package for prospective ERP vendors. With their experience through the ERP implementation process, consultants are in a good position to identify key assets throughout the workforce. They can recommend early adopters and other employees who will contribute to the success of the project and identify the people in the organization who are prone to working against progress. Consultants are also able to keep the project as a whole on track and on time — such as master data cleanup and change management initiatives — that will get the implementation off to a running start and avoid timeline disruptions at the very beginning of the project.

In the end, no matter how far and wide you can take a full business transformation at this time, keeping these points in mind during your ERP replacement or modernization will maximize the value of the work you do now and set the stage for more value into the future.

Business Transformation

ERP replacement is not just an IT project

December 8, 2017October 19, 2018
by David Warford

ERP replacement is often considered to be an IT project. This makes sense. After all, it’s the IT department that must handle and resolve the challenges caused by an outdated system. They know the daily toll it takes firsthand- both on the workforce and on the company itself.

Once the need for a new ERP system has been identified, who in the company should be expected to manage the project itself? Many argue that it is an IT project, and therefore IT should run it.

There is just one problem with that perspective: an ERP replacement or modernization is never just an IT project.

ERP projects touch every facet of your company. No department is left unaffected, and technology requirements are only one factor. Your business processes and how your people work must be taken into consideration from day one if you are going to successfully identify and modernize your company now and for the future. If these pieces aren’t in place at the beginning, there will be some hard realizations farther into the project as key considerations come out that were not previously identified. This will impact the cost, timeline, and even the success of your replacement.

The only path to success is through working with this fact, not against it. Turning your ERP replacement over to your IT department is a recipe for failure. This is not because they aren’t highly capable professionals. I would venture that, as with most IT departments, you have highly talented and skilled individuals. They need to be able to focus on their strengths and continue bringing value to the company. ERP replacement is a very specialized and intensive undertaking. While the IT director and their department need to be actively involved throughout the project, ERP projects take a different skill set than the regular demands of the IT department. It is unfair and unrealistic to expect them to become an expert overnight in something that requires years of knowledge and experience to master.

An ERP project will require hands-on involvement from the leadership team, the IT department, and other key stakeholders. Managing this project overall, from its inception, to developing a business case with the right goals and strategy, to the right roadmap, and then on to selection, negotiations, and implementation takes specialized knowledge. It also takes deep and wide experience and a lot of time. No one really has the time to stop everything else to become a specialist in the ERP industry. Even if they did, it would take years to get there.

One other point to consider: If you put your IT director in the position of running the project, they lose their ability to be a member of the team needed to analyze the process. It will be difficult to gain consensus in this role if the team feels like the IT department is pushing their own agenda. When the IT director is a member of the team, they can serve as a voice to offer valuable input.

This is why consulting firms can bring value to an ERP project. A good consultant will bring that deep and wide experience to ensure you are taking the right things into consideration, involving the right people and departments when needed, and allowing your employees to focus on their primary jobs the rest of the time. Consultants will work with your IT department and other key people to help the project succeed. A good consultant will get your project completed successfully with significantly more value and significantly less wasted time.

Overall, the IT director and their department is clearly vital to the success of your ERP. But help them be successful by supplementing their deep insight into your company with professionals who have deep insight into the industry.

ERP

ERP Replacement requires due diligence

November 29, 2017October 19, 2018
by David Warford

New solutions can mean old headaches without it

In its desire to solve the problems of its old system, company leadership has been known to rush through the decision to buy a new ERP system without taking the time for proper due diligence. This isn’t skipped intentionally, but because the focus is so tight on fixing current issues. After the glow of a major new purchase wears off, the realization washes over the company – the ERP seems faster but the same problems persist. Essentially, they “bought the demo”, not the real functionality they needed.

That first wave of frustration gives way to grumbling and before you know it, the staff has created some clever derisive nicknames for your brand new system.

THUD!

Part of the problem goes back to whatever leads people to cut corners on their due diligence while choosing an ERP. Once ERP vendors catch wind that you’re shopping for a new ERP, salespeople start flooding your inboxes and voicemails with product pitches, white papers, and quick demos. Every presentation is designed to look great and make you feel like your business will run 110% faster with the new technology.

With so many attractive options available, it becomes necessary to winnow the field down to a few options. Unfortunately, this process can lead people to gravitate toward the familiar, and they pick options that look similar to their current ERP.

What they end up with is a new system which replicates what the old system was doing but faster. Solutions that appeared easy to use in the demonstration are cumbersome at best when used 30 times a day. And in the worst of cases, a key business requirement is missed because the process was focused on what the old system did versus what will be needed to compete in future years.

Time for due diligence

Take a step back for due diligence. This will help ensure you are considering what is best for your company and what you actually need before you even look at ERP options. You may also want to consider an outside consultant. They will help guide this invaluable step and help you set a manageable timetable and expectations. They can head off problems before they begin. As an advocate for your business, the consultant can step between you and the vendors to shield you from time-consuming pitches and demos that aren’t the right fit for your needs.

In the end, it’s important to spend more of your valuable time gathering business requirements and identifying needs for future growth. Keep your goals and strategy clear and avoid getting bogged down with short-term problem solving. A new ERP system is a tremendous opportunity for your company that doesn’t (or shouldn’t) happen very often to remove those old headaches once and for all.

Business Transformation

ERP Modernization: Why not keep it internal?

November 13, 2017October 19, 2018
by David Warford

You’re faced with a major project. Your company needs a new ERP system and getting approvals for this is not typically smooth sailing. It takes a lot of time, money, and resources.

Once your company has agreed to move forward on a new system it’s normal to consider going through this process alone. After all, why would you spend even more money and hire an outside consultant when you have highly competent IT professionals in-house?

For many IT projects, I would agree with you. Your internal resources are usually just what you need to accomplish your goals. But when it comes to ERP, the factors are much deeper and often hidden on first – or even fifth – glance.

Here are a few things to consider before you jump into the ERP abyss on your own:

ERP modernization is NOT merely an IT project. It touches all facets of your company, involving your people and business processes in addition to your technology. The whole company must be involved at different levels for this to be a success.
Because this project will involve more than just the IT department, who will have the time to manage this? Have you dedicated one internal resource to oversee the project? If you have, then good for you, but you need to ensure they have nothing else on their plate. When other issues bleed in, it will affect the ERP project every time – usually in a negative manner. This person will also need to help manage the other internal resources needed.
And how about the person who has been chosen to oversee the project? Have they been through an ERP modernization before? Typically, an internal project manager has been very successful with projects but has only been through an ERP modernization a couple times at best throughout their careers.
Statistically, over 70% of all ERP projects are considered unsuccessful. Of those 70%, over 95% were run without a professional consultant.*

Why hire a consultant?

A good ERP consultant is worth much more than the cost it takes to hire them. At KnowledgePath Consulting, we actually reduce the overall cost of the project while also ensuring that it is a success. How?

Let’s start with numbers. Our negotiating power is strong. We help our clients finalize a much better purchase price than they would get negotiating on their own. And, since we take no commission, all the value goes straight to you, the client.
ROI: Throughout our process we identify both technology and business efficiencies to help you improve your efficiency, flexibility, and agility both company-wide and in specific departments. In a recent project for example, we helped our client save approximately $3M a year and had an ROI payback on both system and consulting costs in less than 3 years.
Because we do this all day, every day, our consultants draw from years of knowledge and experience. We also stay up to date on the latest developments throughout the industry, and that’s no easy task either. This translates to leveraging the value of professionals who have seen what it takes to successfully go through an ERP transformation and identifying new opportunities for your business, as well as the hidden pitfalls and roadblocks that can cut the unsuspecting project manager short.
Mitigate risk throughout multiple channels. ERP modernization is fraught with risk. I don’t say this as a scare tactic; it’s common knowledge. A good consultant will help you mitigate this risk from day 1 by ensuring the right questions are asked and answered. They ensure you don’t lose what makes your company unique in the marketplace, that the process minimizes interruption of day-to-day business, and (just as important) that your workforce is properly trained and educated to use your new solution.

In the end, you have choices. You may still believe your best option is to go it alone. But, consider the value you will gain with a ERP consultant working with you before you make your decision. The difference will probably surprise you.

Numbers are averaged from studies by Gartner and Accenture