Usually we keep our biases to a minimum by sharing news and opinions of others that we’ve found along the way. Today however, in a two-part post, a recent real-life client story causes us to break form by offering some of our own opinions about the right way to start the normally costly and time-consuming effort of an ERP implementation. Our client’s story highlights the fundamental principle that that there is one sure way to lower the overall cost of implementing your business management system.
It’s a simple answer, and its proven value – as well as its proven disastrous results when it’s not done – only serve to emphasize the importance of the Business Process Analysis. We’ll keep it simple, but we hope, enlightening, with our recent example.
Last fall, we were called into a manufacturing business that supplies wood cabinetry products to the mobile home and RV industry. They were attempting to implement a well-known ERP solution from Microsoft (also one of the software products we sell). They’d bought in from another reseller and to put it mildly, things were not going well. Here’s what we learned: the original project including software and implementation services was scoped to a cost (excluding hardware) of $125,000. By the time we were called in, projects costs had reached $200,000, and were rapidly climbing. And the company was nowhere near “live.” After meeting with the management and owner, the client agreed to try our methodology.
Now, the first time we’d approached them a year or so earlier, they’d passed on our proposal for a modest, fixed-price Business Process Analysis. We tried to explain, as we always do, that the BPA is the critical first step in any major software implementation. We also tried to explain that our version was no piece of fluff. Rather, it would be an in-depth analysis of workflows and suggested solutions, performed by highly experienced senior staff. And while the effort might run 100 to 200 hours or more on our part, it was not priced that way. Indeed, the price was quite modest. But it wasn’t free either.
When we first met with the client, now about two years ago, they passed on our proposal. They didn’t think they should “pay for an analysis.” As we later learned, they’d found someone willing to do the analysis “for free.” After that, they were told, any further analysis would be done as the project progressed. We later saw the analysis report, and true to form, it was a 4 page high-level regurgitation in broad strokes that discussed what the client does, and how software could solve their problem. That was the extent of the “analysis” that preceded their project, and as a result, now they were nearly double the budget, and double the promised timeframe.
So this time around, they agreed to accept our earlier offer, even as they continued to allow the other reseller to proceed with some critical modifications. The project had been scoped to take about 9 months. By this point, they were 18 months in and, of course, now time was of the essence. By the time we’d concluded our analysis, the tab was up to $225,000 invested with the other reseller. And they still weren’t anywhere near “live.”
We’ll tell the rest of the story in our next post. Stay tuned…