Recent Life Lessons

This year has been full of project starts for me. Both on a personal and business level. Personally my mum moved into aged care this year and I was thrust into the world of pain and bureaucracy that comes with that industry. I was lucky because one of the staff of my client had just been through the same process and we were discussing the difficulties we experienced in the lunch room one day. She mentioned she had an aged care broker help her. I instantly found myself walking in the shoes of my customers. Here I was trying to wade my way through an industry I did not know, one that contains a million minefields, any one of which could have caused us significant pain. Short story is, the broker provided outstanding service and helped us enormously. 

I immediately appreciated the position executives about to embark on an ERP replacement project feel. It is clear executives get too close to their business sometimes and don’t see the forest for the trees. I clearly had fallen into this trap myself. The ERP industry is no different to the aged care industry in that it embraces a product one generally has little deep knowledge about and one that you generally do not work with until you need a change. The value of reliable, independent and experienced help became extraordinarily personal and clear to me.

On a business level I have embarked on a growth path moving from the one man band I have been for 20 plus years to a small niche consultancy with broader capabilities. As a result of this growth, we have started a number of ERP projects this calendar year. By comparing the kick off process for these projects has once again reminded me of some key topics that contribute to the success or otherwise of your projects. My reminders were:

  • How important getting good advice is. As I have mentioned in previous newsletters and in a number of my published articles buying a new ERP is like sending your 16 year old daughter, who has no idea about cars, to a second hand car dealer to buy her first car with no advice or guidance. Fraught with danger. Get an experienced guide. The cost of this will be around 1% or 2% of your overall ERP budget. Cheap insurance and insignificant in the overall long-term view of things.
  • How important the selection of your vendor is. Not all vendors are the same. Some perform extraordinarily well while some … well not so much. I have lost count of the number of times the good fellow well met attitude shown by a software vendor to a prospective buyer in the sales process, can very quickly turn to one of sudden arrogance once the contract is signed. The speed at which this change of attitude can happen is staggering in some cases. 
  • How important an understanding of the language that is used in both the sales presentation and sales proposals is. An understanding of not only the linguistics but, more importantly, what the practical meaning of these words or terms are to your project. That is, an understanding of what those words will mean once you sign the contract. For example; I recall on more than one past project, the sales proposals from the vendor clearly stated data migration was the client’s responsibility. In my opinion this is as it should be. However what each of these separate vendors did not say in their proposal was:
    • The newly released version of the software had no tool at all available to import data. Of course a tool would have to be developed, at the client’s expense. 
    • That the only viable method to get clean, validated data into the system was to use a tool they had developed. This expense was of course omitted from the sales proposal and was an additional cost to the client. Something they had not budgeted for.

In both these experiences, it wasn’t what the sales people said that caused the problem, it was what they omitted to say that was key.

The issues highlighted in these examples can easily be avoided. In one example I was called in to manage the project after someone else had helped the client select the product and the vendor. The other the company did not feel there was value in having someone like me help them select as the vendor seemed to be helping and they felt they had the selection under control. However the additional cost of those traps could have easily been avoided. In these cases the additional cost would have more than covered my costs. While the additional cost of souring the relationship and the mistrust it developed is not directly quantifiable, it is no less real and the implementation suffered because of it. 

Steps I feel you need to take to help avoid these situations are:

  • Put the relationship with the vendor to the test, before you sign the contact. It is critical you use some form of relationship measurement in your selection criteria and not just your system functional scores. You should have a good feel for how the relationship is going but a key test comes when you negotiate over contract clauses and the provisions aimed at ensuring they are held accountable for the quality of their delivery. This process will provide some insight into how amenable they will be to suggestions that are outside the norm for them. Remember there is an 85% plus failure rate in this industry and doing what has been done before and expecting a different result is … (Einstein’s definition of insanity).
  • Avoid the situation of a delivery team and an implementation team completely. I normally do this by outlining early in the selection process that there is an expectation that the people who demonstrate the system to you will be the same people who help you implement the system. Vendor’s don’t like this for a number of reasons and I fully understand them. However my view is they need to comply otherwise they may be trying to hide something.
  • Identify the unspoken meaning behind the language in the sales process before you sign the contract. Remember it is in what the vendors don’t say, rather than in what they do say to a prospect that matters. Be specific in what you understand the situation to be and don’t be frightened to recheck if you don’t feel you have it right. Don’t get me wrong, there are a lot of good vendors and wonderful people working in the software vendor community, but there are as many that are not as well.
  • Get an experienced advisor to help.

If you or anyone you know is looking;

  • To improve the way their business operates 
  • To improve the way they leverage their current system
  • To replace their current system

give me a call for a confidential discussion on the best way to achieve this.

P.S. Did you know, a growing number of clients are asking me to be on retainer so they can access me on call.

© David Ogilvie

Find out how you can take your business to the next level

DOWNLOAD my ebooklet entitled “The 14 Deadly Sins of ERP”. and we’ll let you know when there’s a new article to read.
About David
Experienced independent business consultant with a speciality in ERP to manufacturing, warehousing and distribution businesses in Australia, New Zealand and the United States, with a turnover of $20 million+.
Services
  • Business Strategy Facilitation
  • ERP, WMS & CRM System Evaluation & Selection
  • System Implementation Support
  • Supply Chain & Inventory Optimisation
  • Process Enhancement
  • Project Governance & Advice

Copyright © 2019