3 Easy Ways to Put Your Enterprise Software on a Diet

“I eat because I’m unhappy, and I’m unhappy because I eat. It’s a vicious cycle. Now if you’ll excuse me, there’s someone I need to get in touch with and forgive — meself.” ~ Fat Bastard

Fat Bastard is a fictional character in the second and third films of the hilarious Austin Powers series. Wikipedia defines Fat Bastard as “A morbidly obesehenchman hailing from Scotland. Fat Bastard serves Dr. Evil in his quest to defeatAustin Powers.

Although his extreme size endows Fat Bastard with massive strength, he is also handicapped physically (and emotionally) by his sheer bulk. And his penchant for eating babies doesn’t help…but that’s a story for another day. 🙂

Like Fat Bastard, most legacy enterprise software and ERP systems suffer from extreme complexity and bloat. Typically I find in my work as an ERP Finance consultant that clients have business processes that are old and flabby. I’ve also found that an enterprise software implementation done right is the perfect opportunity to cut that fat.

Anybody knows that losing weight is extremely difficult, right? How can companies break that “vicious cycle” of broken processes and complexity? Well, here are few good ways to put your enterprise software on a permanent weight reduction plan. Fortunately, they’re a lot easier to stomach than you might think. If you do it right,enterprise software can even be SEXY!

1. Streamline Existing Business Processes

A popular term in the 1990s, when I started implementing ERP software systems for Baan, was “business process re-engineering”. I think the biggest problem was that typically re-engineering was an invasive, wasteful procedure that was impractical to implement; primarily because it was too radical. It was kind of like Felicity Shagwell having to – well, you know – “inject” Fat Bastard. 😉

The first step of this re-engineering process was always to do an “as is” study. Its objective, besides padding consulting hours (ha), was to understand the current business processes. Fortunately for the consulting firms, and unfortunately for the clients, the processes were almost invariably deemed broken beyond belief.

My first client at Baan was Grove Cranes, a manufacturer of cranes and man-lifts. In 1996 they paid on the order of 1 million dollars to have multiple Ernst and Young (aka, E&Y) consultants work for 4 months to do an “as is” analysis.

The result of their exhaustive study was a document approximately 2 inches thick that explained everything Grove was doing wrong in their financial, planning and logistics operations. Grove really didn’t need a “diet consultant” to tell them they were fat!

To show what they thought of the report, one of the Grove Finance managers took a copy and – I kid you not – used it as a doorstop for the bathroom in our “war room”. He said it was the most expensive toilet paper in the world. Ouch.

This is what they could’ve done instead:
1) Assume that processes need to be redesigned and don’t waste time documenting how things are currently.
2) Use a process modeling tool, ideally within the software itself, to show at a high level how the processes should flow.
3) Identify processes with non-value added steps, such as re-keying of data, that could be automated.
4) Identify any “side systems”, such as manual planning spreadsheets, that could be handled in the enterprise software.
5) Start a database/spreadsheet “issues” list to expose possible “gaps” in the software functionality.
6) Assign to each issue a type (e.g., functionality gap, process problem, out of scope) and an importance (e.g, 1-10).
7) Identify bottlenecks in the process, such as small part out-of-stocks that are holding up production lines.

2. Prioritize and Pick the “Low Hanging Fruit” First

Now I’m not suggesting that E&Y’s “as is” studies are all a waste of time and money. In this case, however, it was definitely overkill. What would have been much better was to do a quick appraisal of the processes to confirm which business processes most needed correction. Then they could have been prioritized with the “low hanging fruit”, those processes that were easiest and cheapest to fix, coming first.

The consulting and business core teams should have moved quickly to design the “to be” processes and explain how the new ERP software could facilitate the new ways of doing business. In my experience, I’ve found that some business processes usually can be fixed even before the entire system is ready.

For example, one of my manufacturing clients called Busch Manufacturing (no, not the beer company) was upgrading their Baan ERP system to the latest version of the software – Infor LN. During the “to be” business process design, we identified some low hanging fruit in 3 crucial areas:

  1. Material planning was being done on spreadsheets because the old material requirements planning (MRP) engine wasn’t being used,
  2. Purchase orders weren’t being received in a timely fashion, and
  3. Out of stock situations for small items like nuts and bolts were causing production delays.

The easy solutions were to:

  1. Train the shop floor planners to use the new graphical enterprise planning in LN. In the meantime, we fixed the order “lead times” in Baan to move them off of spreadsheets before LN was “live”, and
  2. Install mobile barcode scanners to “automagically” receive the PO’s. Not only did this help speed data entry for Receiving and allow them to catch up, it helped planning and Finance by dramatically improving inventory accuracy.
  3. Start a “pull” system for small parts with Kanban cards and turn the inventory to consigned so that suppliers filled the bins automatically.

BAM – off went the pounds!

Your consulting doctor recommends a “diet correction” rather than yo-yo dieting that – as we all know from experience – doesn’t work. Why “rip and replace” (old school re-engineering) when simple adjustments to the existing diet would do the trick? In other words, we’re not talking Atkins or Scarsdale diets here. The idea is to reduce the portions and substitute protein for carbs, not to eat grapefruit for every meal!

3. Introduce a Reasonable Exercise Plan

One of the things that disheartened my clients in the early days was that the salespeople always showed Powerpoint presentations that trumpeted the benefits without actually showing how the processes would work in the system. I used to say jokingly that everyone would have an awesome result if we could “run the business on Powerpoint”.

I think this ideal view of what was possible gave management the mistaken impression that a new system alone would magically take care of their weight problems. The system users in turn didn’t spend enough time “pounding on the keys”, maybe because they were overconfident that the system would do everything for them.

Consequently, in the beginning at least, many weren’t prepared when they had to take on Fat Bastard in the actual sumo ring. They also struggled to run their day-to-day processes in the new system, at least when the consultants – their humble “personal trainers” – weren’t in the room to guide them.

Here are some components of a manageable exercise plan that we used to get them into shape:

Document and measure your key performance indicators (KPI’s) – This means deciding what measurements in the business need to improve and putting in the proper reporting, preferably “real-time”, to measure progress.

Conduct a regimen of conference room pilots (CRP’s) – At a minimum, there should be 3 CRP’s:

  1. A “high level” walk-through of the improved business processes, which is usually done with management and the “key users” using Powerpoint or a white board.
  2. Demonstrate how you will accomplish the processes you do 80% of the time in the new system, and
  3. Add the exception processes, aka the “20%ers”, and demonstrate them in thecomplete system – that is, with all “customizations” and interfaces fully operational.

Eliminate “functionality in search of a use” – Enterprise software systems, ERP software in particular, have so many bells and whistles you don’t need. My advice is don’t waste money buying or time testing functionality that could be used. After all, what good is a fancy sumo diaper when you’re training for a marathon?

Have the end users test and write their own manuals – I recommend having the key users run the scenario tests and take “screen shots”. Like personal trainers, though, the key users shouldn’t do all the work for them because they won’t learn how to do their new jobs properly on their own. “Work instructions” can be written using a MS-Word template or, even better, an on-line training tool that allows you to record “how-to” videos.

Alas, at the end of the day, no enterprise software can make your company lose weight without the proper discipline. The good news is that I’ve seen many companies successfully implement these steps. Yes, they grumbled a bit – but they did lose the weight. No pain, no gain – right?

So, do you agree with me that enterprise software can be put on a proper diet and that it can help put companies on a path to healthy growth? Do you have any more suggestions on how to make companies more “fit”? I’d love to hear your thoughts in the comments below.

If you liked this blog and would like to check out some others, then here’s a sampling from our InforLN.com business blog:

I also write posts for LinkedIn that are both related and unrelated to this one. If you check them out, please feel free to connect with me on LinkedIn and/or leave comments. I’d love to hear what you think.

If you’re interested in the topics of enterprise software, ERP software, BI, consulting, manufacturing and others, then I invite you to check out my new website inforln.com. There is an enterprise software resource library with examples of work instructions, whitepapers, etc., an ERP software presentations library, videos and our new blog.

Posted by Dan Aldridge

Dan Aldridge is the CEO of Performa Apps, an ERP software consulting firm specializing in Infor LN and Baan. He has almost 20 years of ERP implementation experience. Dan has helped dozens of companies with their ERP software implementations and training including Carrier, Mercedes Benz, Snap-on Tools, Blue Bird, Flextronics and a host of other manufacturing companies. He is a serial entrepreneur and blogger on LinkedIn and with his new site inforln.com.

You can reach him on e-mail, About.me, LinkedIn, Twitter, Google+, Scoop.it,WordPress,Slideshare, Pinterest, and Facebook . His company Performa Apps is on LinkedIn, Twitter, Facebook, Google+, YouTube, Scoop.it, and Slideshare.

I'm an Enterprise Software blogger, ERP enthusiast, CEO of Performa Apps and Founder of InforLN.com. Love the NFL, basketball, manufacturing, ERP software and charities. Movie fanatic. Total nerd and computer geek. Love gadgets, but like some old school things like a good book. Fan of small business. Believer in the power of social media. Washington, DC native that can't stand politics.

Posted in Entrepreneurship and Startups

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Dan Aldridge
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Reston, VA
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