In April 2005, Les Johnson, vice president and CIO of North Coast Electric Co., began to chronicle the highs and lows of rolling out a new ERP system. SearchCIO-Midmarket.com checks in with Johnson 22 months later. Listen to Johnson discuss the process of picking new ERP software. Johnson highlights some of the pain points his team encountered, and offers other CIOs considering new ERP software some advice to make the process go more smoothly -- including ways to make vendors pony up what you want.
Read the ERP Journey Archive for Johnson's full ERP implementation story.
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Read the full transcript of this podcast below:
An ERP journey follow-up: Expert podcast
Brian Kraemer: Hi, This is Brian Kraemer, Associate Editor of SearchCIO-MidMarket.com. I'm here today with Les Johnson, Vice President of IT and CIO of North Coast Electric. Les, thanks for being here today.
Les Johnson: Brian, thanks for having me.
Brian Kraemer: Today I'll be speaking with Les on an ERP implementation he did with North Coast Electric. Let's jump right into it. Les, what did you do right with the implementation?
Les Johnson: Brian, I think we did several things right. One, we chose to have a phased implementation. We actually started in April of 2006 and finished in December of that year. I think that was right because we were a geographically dispersed organization, from Burbank to Phoenix. It gave us the opportunity to work out some of the kinks with the smaller offices and then move right into the larger offices with the lessons learned.
I also think we made a good decision in the partner that we selected. We went through an extensive process. We went through 27 different companies, at the start. We ended up with three, and then two. At the end of the day, there was a very close race between those two, but we felt the corporate culture, the product, and their understanding of our industry swayed them in our favor.
Brian Kraemer: What were the key mistakes that you felt you made?
Les Johnson: The first mistake that we made was that we started too soon. We underestimated the time to correct weaknesses that we saw in the system, most importantly the ability to retrieve information from the system. We felt that, when we started, we knew that we were going to take a step backward, but we, as I say, underestimated the time to correct that. It was a struggle for the first year the system getting deeply used and not having the answers that they had before in an immediate or timely fashion.
The second big problem I think we made was that we were going up on a new client the software was offering, and it hadn't been tested against the scale that we were looking at. We found out mid-stream that we had to change from the Java and GUI client implementation and move back into a character base. Since that time, we've found that wasn't such a bad thing, because we came off a character base system that actually helped our people to transition from software to software and moving into the GUI-based system as needed today.
At the time, it was a struggle, and it seemed like an immense mistake. I think the last, and maybe the most important thing that we made a mistake at was being too patient with our consultants. We should be as critical and conscientious about the performance of our consultants as we are with the features and functions of the software. I think those are probably the three biggest mistakes we made.
Brian Kraemer: So what would you do differently?
Les Johnson: Well, I would've delayed the start time by at least three to six months. We still would've chosen the same company and software. The partnership was right. We had the right culture and the right contract. Giving us a little bit of breathing room to make sure that we had that information retrieval solution in place and that we had the testing on the scalability of the client, would have given us a leg up on making this a little smoother of a transition. Of course, managing the consultant better and perhaps even firing a few of them early in the process.
Brian Kraemer: What are the five tips you tell those just starting out that no one told you?
Les Johnson: First, all software has skeletons in the closet. There are no silver bullets in the ERP world. I would've taken some of our site visit time and gone through more of a discovery process, focusing on what was wrong with the system, what didn't work, as well as how things worked.
Secondly, I would've made sure that we had more front-line people that were involved in all communications and in all demonstrations and site visits. These are the guys that know exactly how things work, and they can ask the incisive questions that, perhaps, we experts, might overlook. We did some of that, but I would've done a lot more of it.
Thirdly, to actually leverage your position as a prospect, not only with your sales rep, but also with your sites visits, corporate officers, wherever you have an opportunity to get the modifications that you need. There's never going to be a better time to get the things you need, then before you sign the contract.
The fourth item is actually the converse of that. You should make modifications only when absolutely necessary. Make judicious use of that power as a prospect and recognize that you don't want to make changes just so you can do things the way you used to.
Lastly, I think, it's a perspective problem to get into this behavioral change with all of your staff across the company. We tend to let our egos get in the way and, perhaps, spend too much time on things that don't really matter. I know we had discussions about renumbering our offices that we probably spent twenty hours on. This is twenty hours with five to seven people. Deciding where we want to put a date, whether it's on the left-hand side of the screen or the right-hand side of the screen, really isn't as important as making sure the screen pops up on time and contains the information that you want.
I would suggest that people concentrate on what is important, what are the key indicators, the key functions, and make sure that the non-technical portion, the processes and procedures, are well defined and understood by everyone, before you go in to installing, asking for modifications, or analyzing any software that you're going to buy.
Brian Kraemer: Have you seen a return on investment with this ERP implementation?
Les Johnson: You know we have some soft numbers. We're looking at the productivity, the increase in our earnings, and the maintenance and size of our staff. We're actually doing more per person, and, again, this is a fairly soft number, but it's in the 10% to 15% range. At the same time, we are still coming up on the system, we're still finding lots of areas for efficiency, and I would expect that over the next two to three years we'll continue to increase our productivity per associate.
Brian Kraemer: What are you working on now?
Les Johnson: Well we're still rolling out some of our RF Warehouse application to our smaller service centers. We have a brand new business intelligence system that we're putting in place. We're looking at some job management functions that are advanced application from our ERP suppliers, and we're hoping to drive into 2008 and 2009 with some very key efficiency tools that we didn't have before. There's always something to do.
Brian Kraemer: Thanks for joining us on this SearchCIO-Midmarket podcast.
Les Johnson: Thank you, Brian.
Brian Kraemer: For more information on how ERP affects you as a CIO, please visit us on the web at SearchCIO-Midmarket.com. Thanks again, and we'll see you soon.