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Thursday, January 8, 2009
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The Perils of ERP Implementations

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Stephanie,

I'm not familiar with your situation and the circumstances surrounding any work done by Net@Work out of New York - so I will only explain a little more the overall problem with the ERP software industry.

None of this is directed at your original consulting firm - or your company - because I have no idea about the details.

1. The way many people select accounting software is broken.

Here's how it looks from the consulting side of the fence.

As a consultant I am called into a conference room (often with 12 or more people) to explain my product.

These people have been at the company 10, 20, 30 years. I've been at the company 15 minutes.

If I'm lucky I'm offered a glass of water before the interrogation/meeting begins.

I call them interrogations because these meetings are often one step short of "bright lights in the eyes".

I'm typically asked rapid fire questions about "does it do this", "does it do that".

There's not enough time to respond "yes, but" and give a full hour long presentation of the caveats involved with each of my answers.

More than once I've left meetings knowing the "committee" who just interrogated me was unhappy that I wouldn't nod my head and agree that we'd make the software work to their specifications.

I lose deals all the time to consultants who nod their heads during these meetings.

You know what though, I'd much rather walk away than be stuck with an implementation that's gone bad.

Great Example:

About three years ago a 15 store chain contacted me to purchase MAS200. They already had made the decision to buy. They were in the process of purchasing a multi-million dollar industry specific point-of-sale system. The vendor on that system responded emphatically "no problem" to every question they asked about whether it would integrate to MAS200.

My advice to this prospect (who later became a client) was that the words "integration" have different meanings and they need to make sure they get a true definition of HOW this POS was going to integrate - what level of detail would be passed to MAS200, etc. The only way they'd know for sure how this integration worked was to setup a pilot test. The vendor said such a test was un-needed because they did this type of integration "all the time".

Fast forward a year - and the client dropped the contract for their POS because ultimately the vendor (when pressed) admitted they could not make the integration work to their specifications.

2. In a 4 hour initial free meeting I am expected to completely grasp the intricacies of a business, understand their industry jargon, processes and challenges - and propose a solution that my out-of-the-box / off-the-shelf accounting program will meet. Oh, and this should all be free, legally binding and able to be implemented within 3 days of proposal acceptance. I'm not kidding in any way about this.

I tell prospects that the only way to really know whether a solution is going to work - is to set up a conference room pilot and enter in their own data, check the output and make sure that it performs to THEIR requirements.

A pilot to me is different than a needs analysis. The pilot usually involves testing on the actual software. Needs Analysis are too often quotes that talk about the benefits but provide no testing (Note: This is not always the case and I have no idea about your specific situation - so I'm talking in broad generalizations here).

Nobody listens.

I've had exactly - zero - prospects take me up on this. I've been consulting on MAS90/MAS200 since 1986.

At last count I think I have 6 EXISTING users testing this year alone (one in Alaska, one in Florida, one inquiring from Michigan, and three others locally).

The only reason these 6 are willing to pay for testing is because they found out the hard way that a "free" demo just cannot go deep enough to uncover all of a companies true needs.

3. Needs Analysis - Schmeeds Analysis - When I hear that any vendor looking to sell something did a "needs analysis" which did not involve the client testing the solution - I want to throw up all over the floor.

What exactly is this needs analysis supposed to show -- that you should buy someone else's product? That their solution won't work? Talk about the mother of all conflicts of interest...

Please!

Again, the only way around this is to setup a test with your data (Remember this is testing - not simply an analysis report - testing is that time consuming expensive thing that I talked about which most people think is un-needed, nobody ever wants to pay for - yet is the single most effective way to determine whether a solution works).

All of this expensive.

I'm reminded of the title of a short book I once read - it is called "If you haven't got the time to do it right, when will you find the time to do it over?"

Instead of the word time, companies can substitute the word money.

Moral of the story:

ERP and Accounting Software is complex. The old rules of the game (4 hour demo then proposal) don't work anymore.

Yet because of competition and client expectations we all keep trying to play by the rules and are surprised when the outcome is a disaster.

Wayne Schulz
Schulz Consulting, LLC
http://www.s-consult.com

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