ERPodcast Episode 29

The Perfect Time for ERP

MFX/Intro

Welcome to the ERPodcast Episode #29 – The Perfect Time for ERP – that’s the title and theme of today’s examination of just that - when should a growing company undertake an ERP project?

And it’s not a simple question. Any ERP project is massive, whether you’re a $12m annual revenue company going from Quickbooks to Sage Intacct or a $200m company replacing DynamicsGP with a new cloud-based ERP.

ERP is an intensive project, needs a ‘all hands on deck’ approach and the stakes are high. There’s legendary stories of Hershey’s Chocolate almost losing the company when a failed SAP effort meant they couldn’t ship product in the middle of the peak Halloween to Christmas season – not good – and there’s also scores of those types of stories from lesser known and more private companies.

So when is, The Perfect Time for ERP?

We’ll talk about 3 real world examples of recent ProfitFromERP clients and the drivers behind those examples.

There’s also a world of opinion in the world of startups – do you do the ERP project Pre-IPO to show potential investors solid financial controls and operational efficiency? Do you wait until the next round of funding to be able to afford the higher end ERP’s with related SEC reporting tools to make sure of compliance needed by a public company?

Then there’s the staffing balance – we’ll have more people on board next year so we can spread the ERP implementation workload across more resources….but if we had ERP already installed we’d need to hire fewer people for the same size operation.

Here’s the conundrum – most of us don’t hire for excess capacity. It’s more like we’re not really sure of the data, it’s coming from disparate spreadsheets, running late, last minute– but the staff is working overtime and Saturdays – if we just had one more person to chase down the data… which is a good solution, but by definition, a growing company continues to grow and we keep adding one more person just to keep up, pretty soon there’s 22 desks in the business office and we’re looking for more space because everyone’s working overtime and Saturdays.

Putting things off til some magical ‘some day’ only gets us from complexity to mass complexity.

Then one day we wake up and we realize ‘WOW - it would have been a lot easier to implement ERP when the business was simpler and we could have managed growth in a lot more systematic method’. Plus, instead of rolling out training to 50 people all at once, we comprehensively train the first 10 and teach each onboarding employee the exact steps using the new software specifically for their job duties. And maybe even start hiring people who’ve already been using the same ERP we just implemented.

So what’s The Perfect Time for ERP?  Let’s look at some real-world examples. Stories of companies that took a leap at different stages and how that all turned out. I’m your host, Gene Hammons, Director of ProfitFromERP,  our business consulting firm helping clients actually create Profit, From their ERP projects. Right back after this!

Stinger out.

Hey – a word about sponsors. Putting together the ERPodcast is a labor of love, it’s often our first introduction to new clients, we also think it’s about giving back to the community, sharing stories of real world ERP projects, how the market works, things we’ve experienced over the years and so on. .

As long as there are still ERP projects that fail or have huge cost overruns or don’t do what the demo looked like it did – as long as there’s a bad project out there, we’ll keep pushing out the know-how to avoid those situations

But – running a growing company ProfitFromERP – just like any other emerging company, there’s a lot to do. Time is critical.

And if we’re going to allocate the time to the ERPodcast – well, we need to do it as more than a net loss leader – so we have sponsors.

The easiest way to get podcast sponsors for a podcast is through placement brokers – you can tell the brokers where your breaks are, say at 2:17 into the podcast – and they’ll pop some ad in there. Next thing you know, the podcast has a My Pillow ad or it’s Toyotathon again right in the middle of an ERP implementation discussion.

But you, the listener, your time is valuable too.

So we’re not doing that.

What we are doing is spotlighting some of the very many related products in and around the world of ERP and business, software and technology.

In other words, give you something of value – knowledge about a product or service that could be vital to the ongoing success of your business.

Just like the ERPodcast topics, not every ad is going to be of direct interest to you.

But as we create the ads, we’re focusing on what our listeners would find advantageous. and you might pick up some ideas on how to integrate something else that is a direct advantage for your company.

Like I say, your time is valuable.

And that’s todays sponsor message about sponsors on the ERPodcast. You can also help us out by mentioning how you found out about a particular sponsor – or – get in touch with us at Info @ ProfitFromERP and we’ll make a formal introduction to get you to the right place with any of our sponsoring firms. Of course if the My Pillow Guy calls, all bets are off.

Welcome back to the ERPodcast – today we’re going to look at three companies –

an emerging pharma manufacturer who’s promising compound just finished the research and development phase and got fastracked FDA approval to go to market. The company is moving from 4 people to a staff of 125, and replacing QuickBooks – all within the first 6 months.

A growing Audio Visual dealer, installer of auditorium, stadium, and amphitheater systems.

And we’ll look at a Oilfield support firm, who can’t track where their million dollar equipment is, even with QuickBooks and a staff of 13.

Before we get into today’s stories – It’s the ERP Planning Calendar update. If you’re looking for the Perfect Time to Implement ERP – the ERP Planning Calendar helps you get an overall estimate of average project timing. Our mainline client base is companies who are evaluating and implementing ERP.  The release date for this podcast is late August of ’23.  For smaller companies replacing QuickBooks, if you were to call ProfitFromERP today, count on putting the project together and the time to evaluate and compare different software – give yourself about 4 months til a purchasing decision, but with the holidays, making a decision and going to contract by 12/31/23 from a late August start is a pretty tight schedule. Then comes the implementation - If you select one of the made-for-cloud options it's possible to get financials live by Q2 next year and related modules operational in the April/May time period – but that’s aggressive.

For midsized corporate projects, 6 months minimum for selection and 6 months for implementation, so you could see a Q4 of ‘24 launch – more likely Jan 1 2025.

So if you’re looking to move faster than Jan 2025, we’d recommend some urgency on the front end – contact us tomorrow at [email protected]

Of course, there are untold millions of elements that could either accelerate or delay these estimates, but averages being what they are – just something to keep in mind as we talk about the Perfect Time for ERP.

Stinger

Story #1. The Pharma company. As you probably know, getting a new drug to market takes years of research, testing, clinical trials, FDA approval – and it’s not just the huge pharma companies. Sometimes it’s a small, independent R&D team, even sometimes a single research scientist comes up with a promising compound. They can then hire Contract Research companies to run the clinical trials, testing and FDA submissions. In many cases, the entire early stage company consists of a scientist or two, a money guy slash angel stage investor, and usually a part time bookkeeper to pay the bills and keep the books in order. Super small staff.

The FDA recently created a fast-track approval process which was designed to get promising drugs to market in a shortened timeframe. What this meant for our Pharma startup is that after years of limited activity, they suddenly have approval to go to commercial and the company needs to expand from 4 people to a business plan estimate of 125 people. New CEO’s and CFO’s Supply chain, national sales, Quality, packaging and labelling, general staffing, on and on.

In this case, the former part-time QuickBooks Bookkeeper was tasked to select and implement ERP.  But this wasn’t the only software project – the FP&A that’s Financial Planning and Analysis department was implementing advanced financial planning and SEC Reporting software.  There was a stock option software managing project. A quality system, a lab management package,  HR software, expense management and AP, as well as a medical CRM package.

Millions of dollars of software investments none of which were coordinated with one another – often, the person who would eventually be in charge of some of these systems wasn’t even hired or identified yet.

We were leading the ERP evaluation only and from the start it was mayhem. We’d narrowed the field down to two products that were being used at our other Pharma manufacturing clients, Microsoft Dynamics AX and NetSuite. Almost weekly, the QuickBooks Bookkeeper would call and say ‘what about Super Biz Pro – she’d say ‘we just hired a new supply chain manager and his former company used Super Biz Pro and he loves it.’ Not having heard of Super Biz Pro, we’d do some checking and find a fledging ERP publisher with 25 East Coast companies – not really a competitor of Dynamics AX’s 20-year international record in pharma manufacturing with thousands of industry references. Nor anywhere near NetSuite’s cutting edge made for cloud technology. But if the guy in supply chain likes it….

And remember, the company is going from 4 people to 125,