By Norman Katz, President of Katzscan Inc.
No, this is not me living my fantasy as a swashbuckler, though as a fencing instructor (a healthy and fun diversion of mine), it would not be too far from reality. Rather, it is an expression of angst when I hear Enterprise Resource Planning (ERP) systems reduced to being called “accounting” or “financial” systems. I let the rather defamatory term slide when it comes from the chief financial officer or vice president of finance at a client of mine: hey, I am pretty picky about most things but even I have my limitations. But I cringe when I hear it from the reseller, because I know that this is a reseller with a myopic focus.
Following up on my last article, resellers with limited business acumen should jump at the opportunity to partner with independent experts who provide both broad and detailed knowledge. Independent experts do not take away reseller revenue: in fact, we actually protect and help preserve the overall relationship. In the same way, resellers who perceive themselves as experts but in a narrow avenue may want to reconsider if they are truly performing in the best interest of the client, or could use some additional professional help themselves.
ERP systems grew out of MRP – Material Resource Planning – systems. The fact is that – and you’ll want to read this, take a deep breath, and read it again, if you removed the accounting functions from an ERP system the ERP system would still work perfectly fine to operate and run a company. (Pause here for dramatic affect.) Granted, the ERP system would not be able to account for what is going on, but otherwise the ERP system would still be able to manage the company’s operations.
Resellers who are primarily accounting firms or just hire accounting experts with some systems knowledge are missing the fact that there is a whole rest of the client enterprise with needs just as important as the accounting or finance department. Remember: the “E” in “ERP” stands for “Enterprise”, not “Accounting” or “Finance”. There are also sales, marketing, sales order processing, manufacturing, distribution, inventory, shipping, purchasing, warranty, returns, commissions, compliance, and various reporting concerns to worry about on a project like this.
But I get it. In many small-to-medium companies who typically controls the ERP system and thus the ERP project? The CFO. So, who does the reseller have to suck it up to? The CFO.
So, here’s what happens: The CFO gets their way first-and-foremost with the rest of the company falling far behind with regard to their requirements. The ERP system gets implemented, and not long after the rest of the company is up in arms because the system does not perform adequately to cover their business needs including report requirements. The CFO may take some heat for this but will also deflect this back to the reseller who will most certainly be the target of attacks by the rest of the company’s users who will simply label their new system as one that “sucks”. Questions as to why the reseller didn’t know, didn’t ask, and didn’t do a better job will spread like a computer virus. And when the company seeks and finds an expert like me I’ll come in and do my thing, improving the situation like I always do.
I have been at multiple client sites where users and executives have expressed that they simply hate their resellers, and the results have led to some of my clients eventually firing their resellers over poor performance and shoddy system implementations. Regardless of whether the client should have done a better job of their own due diligence during the project, the fault and blame will be more directed at the reseller and the software itself. Perception becomes reality, but in this case the myopic accounting-focus of the reseller or reseller’s lack of business acumen was too much at fault. The reseller is expected to know.
Here's the better playbook: The reseller needs to collaborate with an independent expert who has a truly enterprise perspective and is better able to ensure that all stakeholders’ (e.g. reseller and client) concerns are equally heard and represented. The independent expert will also be able to do a better job of uncovering what is unknown, leaving less chance of go-live gaps.
I firmly believe that the value of the up-front analysis is a much wiser investment than the cost of the calamities after the system is implemented and when the gaps hit the proverbial air movement device. This is a value proposition that any CFO, CIO, manager, or executive can understand. Pay a little for it now or pay big-time for it later.
Fencing is a sport that is also known by its nickname “Physical Chess”. While fencing does rely on mastering the techniques of its martial arts style movements, it also necessitates an understanding of strategy when in a one-on-one combat situation. The ability to think two moves ahead is a critical component to being a successful fencer. I teach both the physical and analytical aspects to my students, and the analytical attribute of fencing is one reason why it is so appealing to me. (The use of swords is certainly another!)
As a reseller or channel owner, if you are not thinking more than one move ahead, you are probably not thinking beyond your own needs and putting the concerns of the end customer first. I would submit that is not a winning strategy, especially in this age of commodity competitors where standout service is much more likely to win the day and where no one wants to have to compete on price, let alone lose on poor performance due to short-sighted vision.
Norman Katz is President of Katzscan Inc. (www.katzscan.com). Norman has written for various trade publications, is a national and international speaker, and is the author of two exclusive books. Norman is an expert on ERP, EDI, supply chain vendor compliance, data analysis, business operations, and supply chain fraud.