Select an ERP System – Part 5 – Saving Money and How to Pay For It.

Select an ERP System – a free series to guide you. 5 – Saving money and how to pay for it.

This is part 5 of a series of blogs designed to help you choose and implement a new ERP system.


In this blog, we look at how you can save money on the system but also warn you why potential suppliers might choose to walk away. Previous blogs covered the selection process, ballpark costs implementation and basic checks and are available at our blog page.


Once have chosen your solution, when you buy that solution can have an impact on the price you pay. It’s important at this stage to understand the psychology of the ERP vendor. I don’t mean the reseller here, I mean the company behind the software. Whether you’re SAP, Microsoft or Sage, the name of the game is sites – the more the better!


This is because the first year value of the sale pales into insignificance against the ongoing revenues that can be generated from updates e.g. more users being added, updates to the software and, most importantly, annual support revenues. So, the supplier will regularly offer incentives to potential customers to buy the licence but generally never offer a discount on the ongoing support charges. When is this most likely to happen? As you might find in any retail environment, as the end of a quarter, half year or at the company’s year end. So, if nobody offers you a deal, ask!


Other reasons for suppliers offering delas might be because you are a charity or because the competition on a particular deal happen to be viewed as someone they particularly want to target.


Most ERP resellers can access finance for you and most like to do so, for two reasons. The obvious one is to ensure that lack of money doesn’t stop the project proceeding. The second is that the finance company will check out the customer’s creditworthiness and will quickly advise the reseller if the potential customer has money problems. The reseller can then avoid wasting time on a project doomed to failure.


Finally, don’t forget that many local business gateways or enterprise companies can offer support in the form of grants for the training, consulting and/or development costs associated with the project. The main criteria here will be the extent to which staff will be retained or more staff employed; or that the system will allow the business to sell more products outwith its current geographical area. And, speaking to these funders is another excellent way of confirming whether your potential supplier has a history of delivering cost-benefits to its customers.


How to Select an ERP System – Part 3 – Implementation Costs

In parts 1 and 2 of the series, we looked at the selection process and ballpark costs. In this 3rd part, I’d like to consider implementation issues and, in particular, how the user can contribute to the process and save costs.

There are some basics which are often forgotten.

First, make sure that the project team is representative of the business users. Too often the MD says “This is how we do things here” only to find later in the project that the users at the sharp end have a wholly different way of processing data.

Second, customers tend to be over optimistic about how much time and effort they can put into the project. Take a good look at things like holidays, other projects, is this the busiest time of the year… and so forth.

BUT, remember that you don’t have to wait to the start of your financial year to go live on the system. If anything, that’s a terrible time because there is so much else going on. Pick a quiet (or the quietest) time.

AND, if you have taken more time than you expected to reach that crucial decision on which system to implement, be flexible about you ‘go live’ date. It would seem obvious to all that you have less time but it’s amazing how many businesses are determined to stick to that original date.

Third, it’s YOUR project and not the supplier’s. I have blogged elsewhere about suppliers who hijack the ownership of the project, move the goalposts and end up costing you more. Stay in control and ensure any changes are your changes. This does mean that you need to stay 100% involved and don’t allow the supplier to dictate the project direction.

What will implementation cost?

As a rule of sum, expect to spend the same amount of money on the implementation as you spend on the software. But you can save money in a number of ways.

Don’t be precious about some of the requirements. Always consider the cost-benefit. Is it really that important? Most suppliers will say something can be done but a good supplier will point out the cost and question whether it’s justified.

If you have a lot of staff, consider ‘train the trainer’ as the way forward for training users i.e. a select group of staff are trained, and then pass on that training to the majority. We had one customer recently where a very large number of users were given training by viewing a webinar recording of the training. This also means that new users can be pointed to this as part of their induction.

Take responsibility for data cutover and reconciliation. We provide our customers with spreadsheets formatted with the appropriate columns for customers, suppliers, open invoices and so forth. It’s always a great way to ‘cleanse’ your data as well. Compare deleting an old customer from a row in a spreadsheet with deleting the record in an accounting system. The latter can be time-consuming or even impossible in many systems.

Reconciling financials, customer and supplier balances by checking the trial balance on both systems and comparing aged debtor and creditor reports will save cost and ensure comfort that everything is as it should be.

How to Select an ERP System – Part 1 – The Selection Process

The number one rule is Identify What Makes Your Business Different. There are so many high quality ERP systems out there that do pretty much the same thing. You buy something, you add a margin, and you sell it. You want to record the purchase, manage the stock, record the sale and show the profit in your accounts. Your choice is not what software, just where to find the best combination of price and reputable supplier.

However, it will all go horribly wrong if you haven’t pointed out the differences about your operation. Perhaps you need to sell the item but record serial numbers, or monitor expiry dates, or immediately create a service record and remind the customer that maintenance work is essential within 12 months, or…or…or. If you haven’t listed what you think are your uniques, you can end up in trouble. That’s why it’s often the second time user who gets it most right, having found the glaring functionality holes in their first software selection. So write down your ‘uniques’.

Second, never assume. It’s so common for businesses to upgrade their system and find that things they relied on in the first system, and assumed would be there in the ‘upgraded’ system, are not! This even occurs when upgrading with the same supplier to a new release of that supplier’s software. So write down what you like about your current system and would be reluctant to give up (and anything you hate and are happy to lose).

Third, there are presumably a number of reasons for upgrading. You have a list of things you feel are missing and will be an essential part of your shiny new system. So write down the new functions you’re seeking.

Fourth, prioritise. Some of your requirements may be available bit at extra cost. If potential suppliers know what’s most important, they can point out the additional cost of some of your less important requirements. That way, you can apply some simple cost-benefit analysis and decide whether the extra cost is justified.

Finally, analyse your users. You should split your users into those who need full and unfettered access to all parts of the software – the accountants, the order processing team, the production manager etc. – and those who have a simple functional requirement – entering PO’s for approval, updating project costs, booking stock in and out. It is increasingly common for software suppliers to offer two flavours of user – full and ‘light’ or ‘limited’. The latter can be bought at a fraction of the cost of the former and offer serious cost savings.


Next time – Ballpark costs.

Are some ERP suppliers crooks?

I recently read a very interesting post entitled “Are Some ERP Consulting Firms Crooks?” (see article here). It was aimed at those consultants who are employed, ostensibly, to provide arm’s length, independent advice to businesses but who shamelessly take advantage of their client’s limited knowledge. People who are looking for help to choose and install a new ERP system find themselves conned as projects take longer and cost much more than originally stated.


But many of the points ring true for the scenario where the client is looking to do their own system selection and invites a few ERP suppliers to tender. In such a situation, the customer is relying on the potential provider to be upfront and honest, and offer useful advice. Clearly, they will also attempt to sell their system, but acting in a professional, consultative manner is a great way to win business.


Sadly, I often see the opposite happen. There are the resellers who field their best consultant to charm the customer and present the product brilliantly; and post-order, for those consultants never to be seen again. Or those who offer a terrific annual support rate which locks the customer in for 3 years – and only then does the customer discover that the support isn’t that great; and seems to come with lots of options for you to be charged extra!


However, the customers themselves are often their own worst enemy. Not so long ago, I was asked to tender for a system. The proposed final solution was going to be such a compromise that I felt compelled to write a summary of the likely failings and suggest that they reconsider their approach. But no, the Director was adamant that this was how he wanted it to be. Result – a very expensive system that delivered only a fraction of its capabilities. We, by the way, politely withdrew from the bid.


What’s the lesson to be drawn? In my view, references are everything. Whether it’s a consultant assisting the business to implement or a supplier offering up advice on how they would satisfy your requirements, speak to their past clients. And, one other thing.. another reason that the article branded some ERP consultants crooks was their ability to put forward ‘tame’ clients who would confirm how great they performed. So, don’t just accept the first reference given, check out a few.

NAV2013 – What’s New in Reporting?

I’m grateful to Mike Glue at JustFood ERP who put together a handy summary of what’s available in NAV2013 so far as reporting is concerned. There are changes from the ‘classic’ environment but partners and users shouldn’t be too worried. Microsoft NAV 2013 will have hundreds of reports available out of the box.

Here are some common questions and answers.

Are There Any Built-In Reports?

Yes. There are built-in “native” reports that can be modified as required. These reports can be manually printed and/or be utilized within business logic. The types of reports included:

  • Documents (invoice, pick sheet, cheques, etc.)
  • Analysis (sales by customer, inventory valuation, trial balance, etc.) reports
  • Processing report – one that provides functionality but is not necessarily printable.

Is the report structure different?

No, it is unchanged. A typical report requires two pieces to be developed:

  • The data model – where you define the tables, fields, and business logic required for getting the data out of the database for the report to use.
  • The layout – responsible for the visual display that the report shows on screen/paper. (Processing reports do not require the layout piece to be developed as there is no visual output.)

Do I need to choose Classic or Role Tailored Client (RTC) report layout?

No. The Classic Client has been removed with NAV 2013, so when developing the layout for a report in NAV 2013, the only option is to create a Role Tailored Client (RTC) layout.

Is Visual Studio used to develop a report?

Yes. Visual Studio 2010 is required in order to create the layout for a report in NAV 2013. You can use the free version of Visual Studio 2010, but you must use the web developer edition (Visual Web Developer 2010 Express). Visual Studio 2010 is the only version supported currently by NAV 2013.

I’ve been creating RTC reports for a while; is there anything new for me to learn?

Yes. While the data model is still defined in the Object Designer, the way that data model is defined has been completely changed. The interface for defining the tables and fields that the report will use is an all new structure. From my own observations, though, it appears that the learning curve is not too steep for someone already familiar with building reports in Microsoft NAV.

Can I upgrade all of my existing reports to the new reports?

Maybe. If your existing reports were created with a RTC layout, then there is an upgrade process that can be performed on the report to upgrade the data model and layout to the new platform. Due to changes in the Visual Studio version, however, you may be required to perform minimal cosmetic changes to the layout after upgrade. If your existing reports were created with only a Classic layout, then the data model can be upgraded; however, the layout cannot be upgraded, and that must be further developed on the NAV 2013 platform.

What do the reporting changes mean to me as a TURNKEY customer?

Hundreds of out-of-the-box reports are still available in Microsoft NAV 2013. Although some new knowledge will need to be learned, any of these native reports can be customised as desired, just as they have been in the past. For customers who are upgrading from a previous version, you’ll need to investigate to determine the process required for moving any custom reports to NAV 2013. A certain amount of development work will be required to upgrade reports to NAV 2013.

Once again, thanks to Mike for his succinct summary!

Great Service – I don’t think so..

A recent bad experience with a service provider set me to wondering about what constitutes great service.

Imagine the scene. It’s a freezing cold morning in December (this Tuesday past actually) and you arrive on the crack of dawn plane into Luton Airport. It’s even colder in Luton than it was when you left Glasgow (well I did say ‘imagine’ the scene).

You arrive at the car hire desk and hand over your email confirmation eager to pick up your car and fight your way on to the M1, off on a cross country journey to a meeting in deepest Oxfordshire. The first words that greet you are “I’m sorry but we have NO cars!” But I have a piece of paper in my hand clearly stating they will provide me with a car so this can’t be. But it is. And the help offered? Well, there’s none actually. This car hire rep clearly has a degree in the bleeding obvious as he kindly asks if I want to cancel my booking. Cheers, mate that should see me on the road then.

There followed a dash from car hire desk to car hire desk, with each declaration of ‘no spare cars here’ increasing my anxiety threshold until at the fourth time of asking I was informed that a car was available. A chirpy young chap dashed out with a scraper and, after much huffing and puffing, my chariot-to-be was slowly revealed. A little Chevy Spark with a close similarity to a shopping trolley.. but at least I would now make my meeting on time.

Where was the great service? Well nowhere in this particular scene. Sure, I was provided by a car but it was of lesser quality than I thought I’d booked and cost me more. So instead, I’ll focus on everything that was so wrong in this situation and how taking the opposite tack constitutes good service.

1. Communication – customers don’t mind bad news so much as long as they are kept informed. This car hire provider had my mobile number and email, yet no attempt was made to warn me that there was a problem.

2. Solutions not problems – again, customers expect that when you identify a problem, you’ve also thought about a solution. In this case, the rep had no solution other than to cancel. No attempt had been made to come up with an alternative arrangement, or even to establish if other providers had vehicles.

3. Follow Up – they screwed up. Yet the one contact I received was an email confirming the cancellation. No ‘sorry’, no discount voucher or M&S gift token to lessen the pain. Nothing, rien, nada, zilch.

And the end result?  One car hire company who won’t see my business any time soon, and a hugely negative story that will be re-told and re-told. I heard later that they were 38 cars short of their ‘confirmed’ bookings. Multiply the negative press of that story being told by 38 people over and over. The irony was that as I landed back in Glasgow, the cabin crew encouraged us to use their recommended car hire partner – guess who?