Co-Founder and Partner

Author: David Warford

Managing ERP expectations: The story of the hammering pipe…

February 27, 2018March 9, 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, 2018June 1, 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, 2018June 1, 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, 2018January 13, 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, 2017December 8, 2017
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, 2017February 26, 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, 2017November 13, 2017
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

Business Transformation

Insanity and ERP Transformation

August 13, 2017November 20, 2017
by David Warford

Insanity. Doing the same thing over and over but expecting a different result has become a popular topic of conversation in the business world. Executives take great pains not to achieve this status. Yet there is a problem: it still happens all the time and certainly in the scope of ERP and Business Transformation.

It shouldn’t, right? Your executives are smart, hard working people. But at its core, insanity is sneaky. It feeds into a core human behavior: the resistance to change.

Imagine this scenario. You know your company needs an updated ERP system for a plethora of reasons. But you delay for just as many reasons. You decide to stay with what you have for just another year. You keep fighting the same battles and justifying that it is still less risky or costly than going with a new system. Every time you make this decision you probably experience two things. First, a flood of relief that you can take it off your plate right now. Second, a nagging voice that tells you the need for this change is only going to increase. Sound a little familiar?

One year will bleed into two or three, but at some point the time finally comes. Whatever that final straw may be, you make the commitment to transform your business. Now it’s just a matter of how to change and what system is best, and this is where it gets dangerous.

ERP systems have changed significantly in the past few years. Even more so is the rate of change overall that we have experienced in the business environment. No matter what your industry is, you are at risk of becoming stagnant or obsolete if you have not been able to move your company into a flexible an agile environment. You have to protect what makes your company work but also change the significant number of processes that are holding you back. You start looking at ERP systems and face a sea of options. Wave after wave of decisions and considerations hit you from every direction.

What happens now is crucial, and it’s where insanity sneaks in unbeknownst to you. With so much at stake and with so many decisions, it is natural – and common – to choose a system closest to what you are using now. It feels like the safest choice. It requires the lowest learning curve, the least amount of disruption to the workforce, and less opposition throughout the workforce. You feel that flood of relief wash over you again. You did it! You made the change and survived. But did you really select a system and implement it in a way that allows your company to grow and to become better positioned to compete, or did you just find a better way to generate reports?

It is important to recognize at the outset that change is hard, and no one denies that. So when you go through this process start out with one very important question: what specific results should come with your transformation? Set out extremely clear goals. Not just day to day work but also where you want your company to go into the future. Put all obstacles to the side for now, and allow yourself and your team to dream big. A transformation is your opportunity to bring real change, real growth, and real competitive value. If you spend too much time worrying about where you are now, you won’t make the changes necessary to get where you could be. Along with technology changes, so has the way in which these transformations must take place. Going through this process the way you have before may also lead you into the depths of insanity. If you fall back on what’s comfortable you will likely go through just about as much work but in the end you’ll be right back where you started or so close to it that it won’t matter.

Be very clear with yourself and your team on the goals you establish, why you set them, and what needs to happen within your business to accomplish them. Then you can fight that sneaky insanity and experience the real change you are working so hard to achieve.

Want to learn more? Download our 2-page paper on Insanity and how to avoid it.

Business Transformation

When non-compete clauses become non-complete headaches

July 17, 2017August 8, 2017
by David Warford

Editor’s note: This posts on a non-compete clause is the third installment of our ongoing series on protecting yourself from unscrupulous consulting practices.

There are times when the innocuous non-compete clause that was included in your original consulting contract becomes more mountain than molehill and suddenly, your project’s completion is threatened.

The non-compete clause

Suppose for a moment, that you hired a consulting company to help you with your ERP or business transformation. You hammer out all the important details, including specifically how the work to be done is outlined in the engagement letter. You are asked to sign a non-compete so you cannot hire any of the consulting company’s contractors or subcontractors for a specified amount of time should you decide to part ways. This is pretty standard stuff. The temptation is to sign it without a second thought and move on.

A non-compete clause makes sense; if a service company uses contractors to do some or all of the work, what’s to otherwise stop that contractor from taking the business away from the company that employed them and work the project on their own? So on the surface, a non-compete clause in your ERP consulting contract should not be alarming. Really, it should be expected.

Except.

There is a question almost no one asks because the definition of a contractor seems like common sense. Based on your own experience, if you were asked who your consulting company’s contractors are, how would you answer? The logical answer would be the consultants themselves. Consulting companies generally work with consultants in one of two ways. Consultants are either W2 employees of the company or they are contractors hired to represent and work as a consultant for that company.

The assumption is that the definition ends there. The problem is that in reality, it doesn’t. A contractor can be anyone or any company that works with another company.

Enter the unscrupulous consultant.

The unscrupulous consultant adds more to the contractor/ subcontractor definition. They include any company and anyone used in your business transformation. This includes the software companies, software vendors, implementers, VARs, and any other person or company that could be involved in your project. This equates to putting you over a barrel.

If you decide to part ways with your consulting company in this situation, then you will have to put your entire project on hold until the non-compete time has lapsed. That’s not good any way you look at it. What if you have chosen your new ERP system but you just don’t want to work with that consultant for the rest of the project? Looking at your contract on the surface, that shouldn’t be a problem. But wait, the software vendor you chose is technically a subcontractor of that consulting agency unbeknownst to you. So are other vendors who supply that software. So are all the implementers. See that barrel rolling toward you yet?

Ask questions

The good news is that there are things you can do – as long as you haven’t signed the engagement letter/contract yet. Make sure every detail is spelled out. Require the consulting company to define and list every contractor and subcontractor that would be included in their non-compete. Make sure that they disclose to you that the list they supply is all inclusive so they can’t ‘forget’ to mention a few. Make sure it is in writing and as part of the contract. If the consulting company refuses, brushes it off, or downplays it, you should hear those warning bells in your head ringing loudly. Hold your ground. If they refuse or hedge, then walk away. If the consulting company is truly independent and transparent, they will share this information with you.

You hire consultants to help make your project run smoothly and successfully. Good consultants will do that. Don’t put your company at risk by signing a contract that puts you at the complete mercy of your consultant.

Next Time: This short series on recognizing unscrupulous consultant practices wraps up with one more red flag of which you need to be aware. It’s a doozy, so please stay tuned. Sign up to receive a notification when we post so you don’t miss out.

Business Transformation

Supply chain agility: How fast can you adapt?

July 14, 2017July 14, 2017
by David Warford

We live in world of immediate gratification. Consumers want what they want, when they want it, and if you can’t meet those needs they can easily find someone else who can. A flexible supply chain can adapt to changes in demand allowing your to move with these changes. Having a deep supplier pool, for example, will help you adapt to unforeseen increases in demand that can come without notice. We have previously discussed a few steps that you can take now to put your supply chain in a position to adapt with flexibility.

But what about agility? A supply chain that is also agile allows you to react to market demands quickly, and that is what brings the real value of flexibility in your business.

Agility is the power to move quickly and easily.

Test the agility of your supply chain

The time it takes to accelerate your supply chain throughput so you can meet your customer’s delivery requirements is one measure of agility that you should test now. If you wait for an increase in customer demand to test your supply chain’s agility, you’ve waited too long. You need to prepare for what could happen, so you’re ready to tackle what does happen.

Anticipate the future

The way you prepare for the unexpected is by anticipating, not predicting, the future. Here are a few steps you can take to get a clearer picture of what might be on the horizon:

Get to know your customers and their production plans
Find out if they are introducing new products and/or improving others
Ask about the anticipated demand
What’s the plan if demand is exceeded
What other variables might effect demand
Look at market trends as they relate to your industry and similar industries

Armed with the answers, you can turn your attention upstream to your suppliers. Even if you have confidence in your team’s ability to meet any challenge customers put before them, you have to know if your suppliers are up to the task. It’s a straightforward equation: your ability to meet customer expectations is directly related to your suppliers’ ability to meet yours.

Even when you are satisfied with the flexibility and agility of your supply chain, the work isn’t done. A quarterly review of your customers’ needs will provide ongoing visibility into potential changes, along with the information you need to test your suppliers’ ability to assure you can meet customer expectations.

In a market that seems to change constantly, your supply chain is always at risk of suffering from a weak or missing link. Constant vigilance and keeping flexibility and agility top-of-mind in your supply chain management strategy will help you see changes before they become a problem, giving you time to adjust course and protect your competitive advantage.

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