Three Steps to a New ERP System

My kids and I aim to watch an NFL game in every stadium across the country. At the rate we’re going, I’ll be about 130 years old before we achieve this ambitious goal.

So far, I marvel at the beauty of each stadium we’ve attended. Years went into the planning process before ground was ever broken. Deep thought was put into every amenity we see at each stadium today. Stadiums did not just rise from the ground and appear out of nowhere. The monuments we adore from afar required a team to realize the owners’ visions for their gridiron homes each Sunday during the autumn and winter months.

When selecting stadium construction projects, I think of the ERP process of finding, getting, and implementing a significant software system. One project is physical, and the other is intangible. Yet, both projects share similarities on both the front and back ends.

Hire Experts

I loved being a financial controller. In my first position, I replaced the CFO and the former controller. Accordingly, my work was cut out for me.

Nearly 100% of the projects I recommended in that first controllership position were typically approved and implemented. One such project stands out. And it required understanding human nature.

Years earlier, I learned you should never let a CEO make a software decision because sales reps know the right strings to pull. Reps never start the conversation by discussing what’s under the hood of the software and the hard work needed to implement the system they sell. Instead, they’ll get to the point by showing reports and analysis. “Sold!” CEOs have difficulty restraining themselves when they see the software’s reporting capabilities. Forget the money and time needed to execute the implementation.

In my controllership position, the CEO and merchandisers used an analytics system I cobbled together using Monarch, Access, and Excel. I was not too fond of it, but everyone else loved it. My system was clunky and required too much manual intervention. I wanted a system like Cognos but knew we couldn’t afford it.

After a month of searching, I picked Pilot and contacted someone on their sales development team. After I got comfortable with the capabilities of their system and contacted a few of their customers, I knew Pilot could work for the retailer I served.

I told the business developer I’d give him an audience with the authority to write a check under one condition. I told him to start with the reporting capabilities first. I also hand-picked who attended the sales presentation, including our CEO. I knew we’d have a new system soon, but I would have never predicted that the sales rep would leave with a PO after a 45-minute demonstration.

Again, here’s the lesson: Never let a CEO make a software decision independently. We need to follow the path that people on a team tasked with building a football stadium, and that’s to hire a team of teams.

Whoever is in charge of building a football stadium, the first thing they do is hire consultants, an engineering firm, and an architectural firm.

In the ERP world, we only need an expert in this field who has worked in many industries and implemented as many as a dozen different ERP solutions. Step number one is because we never want to commit a Jeff Bezos Type One Error/Decision. These are commitments where there is no going back. It’s like jumping off a cliff. Reversing a poor ERP decision is nearly impossible to achieve.

I applaud CEOs who are aggressive, decisive and want to move fast. But building a football stadium without a team of teams would be disastrous. Even though I’ve quarterbacked many ERP solutions, step one is hiring a great ERP solution before we start spec’ing out business requirements.

Just as we like to review up to about five solutions when searching for an ERP solution, I recommend the same for ERP consultants. Obtain no fewer than five recommendations. But always include Eric Kimberling on your shortlist. You probably can’t afford his firm, but you will learn a lot by having an introductory call.

Throw Away the Shortlist

This recommendation could easily be included in the one above.

I’ve seen this over and over again throughout my 20-plus-year consulting career. “Mark, my industry uses ‘x’ as their ERP solution, so let’s just get it.” Or, “Mark, I’ve heard a lot about NetSuite, and I’ve even heard you mention it.”

Stop, stop, stop. I don’t care if you run a vehicle leasing business, a professional services firm, build buildings or sell merchandise. Intacct will generally meet your needs with the right bolt-ons. However, I never include them on my shortlist until the consultant mentioned earlier helps us to specify our requirements.

Please leave your top-of-mind solutions on the sidelines, and let’s let the process play out because we cannot afford a Jeff Bezos Type One Error.

It’s a Team Effort

I don’t have good stats, only anecdotal insights. About half the ERP implementations I’ve encountered started with the CFO and/or controller being the driving force for finding, selecting, and implementing an ERP solution.

We hire a consultant because they have the wisdom to pick critical players to be on this team. The best consultants understand a vital fact about any business–there are no silos. Consultants can clearly see groups of people with specific roles working within a more extensive system. Ignoring critical players across various value streams can be disastrous during post-implementation.

A Few Other Quick Tips

If you hire the right consultant, life will be much more stress-free throughout this arduous process. Before wrapping up, here are a few other ideas based on my experience:

1. Read The Phoenix Project before hiring the consultant. Enough said. You’ll quickly decipher the critical points in that book for selecting and implementing an ERP solution.
2. Regarding books, read Radical Focus because her weekly four-square meeting framework is brilliant. When I’m on the consultant’s selection team, I require that colleagues read Working Together by Lewis (inspired by the legendary CEO Alan Mulally).
3. After the selection process, you will go live in 90 days. If not, you hired the wrong consultant. One of my firm rules is that all reports are written before going live. Never let the consultant do this. We were report-ready on day one in 100% of the projects I’ve quarterbacked. If your team does not have this skill set, you either need a controller, or you need to replace the one you have.
4. A new ERP solution can either bring everyone together in a more collaborative manner or it can cause havoc by deepening the silo mindset. Accordingly, life after an ERP implementation is critical in getting team members rowing in the right direction at the right cadence. Please familiarize yourself with Google’s Project Aristotle. NYT has an excellent article on this, as the writer focuses on team building.
5. Finally, the work is never done. My origin story lies in manufacturing, so I’ve been influenced by Ohno, Deming, Goldratt, and many teachers in the lean movement. That means continuous improvement (CI) is always on my brain. However, CI is a double-edged sword because CI thinking can get in the way of blowing it up and starting over. CI can quickly replace creativity and innovation if we let it. Still, the work is never done after implementing our new ERP system or replacing an older one. Year two should be about making even more significant gains in productivity and effectiveness to increase sales while radically improving customer satisfaction and loyalty.