Groundhog ERP Day!
ERP Project happening Again, and again, and again....
A Pennsylvania Dutch superstition - if a groundhog emerging from its burrow on this day sees its shadow due to clear weather, it will retreat to its den and winter will persist for six more weeks; but if it does not see its shadow because of cloudiness, spring will arrive early.
“What? Are we going down that path again?” Mr. Badger, the Chief Operations Officer, asked in amusement. “Haven’t we tried this same project every 2 years and always stop right after we do a bunch of ‘waste of time’ demos?” The room was a bit chilly since it was only the beginning of February. The topic was replacing the ERP system. The current system had been implemented about 15 years ago and lacked zillions of features, so it had become customized beyond the ability to upgrade. That is why no new system they had demo’d seemed able to replace the current old bones.
But the last management report said that the old, outdated ERP system was a critical flaw in the company and should be a top priority to address. Data, data, data, the consultants kept repeating. So, there they were, today, exactly the same position as yesterday. The sun was shining, and they’d be looking at their shadows, one more time! Every six weeks, the company held an executive meeting where each of the execs were to give a report on results to date and to bring up big initiatives for the coming year. This time the meeting was being held at a retreat in Punxsutawney, Pennsylvania.
Most of the executive team was gloomy. Rather than an upbeat discussion of great projects to undertake, each of the executives was feeling defeated. Chief Sales Officer Doug Daks was spending his weekends building his sales team reports in Excel, and although excited about the growing sales, he was down in the tooth about the amount of burdensome work-arounds to get reports. The Chief Marketing Officer needed more and faster data on sales for each SKU associated to each marketing campaign by sales channel. And the CEO, Chris Candlemas, was exhausted because she had been up all night worrying about the meeting she was to have with investors next week.
The new CFO, Phil Groundhog, was a bit nervous. Although he’d only been with the company 6 weeks, he had experience from a similarly sized manufacturing company and he wanted to talk about undertaking an important project to change-up the ERP system. He was afraid the CEO would balk at the hefty price tag. To calm himself before his presentation, Phil went out onto the patio outside the conference room for some air. Looking up, he saw the sky starting to cloud over, blocking the sun.
Not seeing his shadow, Phil smiled from ear to ear. This was a sign. Phil turned to scurry back into the room. His presentation was going to touch on the top 3 points the company needed to consider now. His project would get green-lit today, and he would not have to wait another six weeks! Phil started his presentation by outlining what he knew about their systems’ Current State. From there, he pointed out the areas that were holding the company back. Finally, he gave a picture of the Future State. He provided a clear vision of the steps to be taken to modernize the operations of the company.
1. Current State. The outline showed the major departments, the software in place, and the missed connections between departments.
2. Areas that are holding the company back: There were more ‘glitches’ than we have space to present, but a few examples included:
Phil outlined how Sales Orders were handwritten, then entered into the system, then exported to a spreadsheet, and finally posted to the General Ledger in summary. This created reconciliation errors every month. Cost to the company? About $5,000 every month or $60,000 every year.
Doug, the Chief Sales Officer, growled at this. He declared it was much more of a cost than that since he was also downloading the same data to summarize sales by sales team, by region, and by product class. Doing this was crazy! He estimated the cost to be more like $10,000 a month, or $120,000 worth of time every year!
The Chief Marketing Officer chimed in. She was downloading the very same data into spreadsheets so that she could figure out sales performance for the SKUs targeted by marketing efforts. So the cost was yet higher!
Mr. Badger, the Chief Operations Officer, gave out a loud guffaw. He proclaimed that Inventory was never going to get reconciled to the system, and this whole effort was another waste of time. There were no systems that could fix the company.
3. Future State: Phil presented a vision of a Future State in which each of the departments could draw upon a central repository of data and master tables to allow for Sales, Inventory, Warehouse Management, Procurement, and Marketing data to be in sync. Dashboards of sales could be up-to-date every day for every salesperson, summaries by sales region, and sales performance by select SKUs across the entire company.
CEO Chris Candlemas became excited. She had envisioned reports that she wished she could receive and that she was certain the investors would ask to see. She wanted the system to be up and working now.
“When can this magic solution get going?” she asked.
Mr. Badger interjected, a quiet disparagement, “Maybe by 6 Groundhog Days from now.”
Phil darted a glance out the window and smiled as he saw the gray darkness of a cloudy day. “Well, ERP solutions take a bit of time, but let’s green-light this project now – there are many steps ahead.”
Mr. Badger mumbled, “It’ll never happen.”
Chris Candlemas surprised them all. “On this cloudy day, Phil is our beam of light to the future. Let’s do it!”
And so, the project was launched, with an extra 6 weeks of sunshine, to boot!
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