Real Issues. Real Answers. Transitioning to a different ERP system

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With technology playing an ever-growing role for our companies, LBM dealers and distributors are looking to get the most from their ERP systems. The decision about which ERP system to use and how often it should be upgraded play a critical role in nearly every department across an LBM dealer’s business. From the front office, to sales, to the yard, nearly everyone interacts with an ERP throughout the course of their workday. Finding the right one is a huge step for a company, and that’s only the first step. Implementation, training, and upgrading also play vital roles in the selection process.

This month’s Real Issues. Real Answers. survey was suggested by a reader who is looking for insights as she and her company evaluate upgrading their system. Thanks to the nearly 200 readers who responded to our survey and shared their insight into transitioning to a different ERP system.

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What advice do you have for this dealer?

What tips and insights would you offer to help ensure A) a smooth transition from an older system to the new one, and B) satisfaction with the final result? Also, if you’ve gone through a conversion recently, what would you do differently next time?

Responses from LBM and specialty distributors

“Allow twice the time and twice the budget you initially figure to get competent on the new software.”

“Double your current schedule and it will be smoother in the long run.”

“Ask and sign up for a service package for after the sale. ERP companies are in business to get you on their platform and tend to leave you on an island once implementation is complete.”

“Clean up as much data as possible before the conversion. We thought we did a decent job, but almost 7 years later I am still cleaning up bad data.”

“We transitioned to a new system several years ago, and we found we did not prepare our inventory which was located in multiple locations well enough for the new platform. Over-prepare and you will not be disappointed.”

“First off, get as much training as you can get before starting. Secondly, do it in your slowest sales period and make as much effort to the transition from as many people as possible. The up-front work will pay off in the future.”

“Above all train, train, and train. It does not matter how great your staff is with technology, there will be huge issues the first 2-4 months. Ask for details on everything. In order to make your investment worthwhile, make sure everything is completely understood and every section works the way you expect (it will never do what the old system did in the exact same way but it will work how you need). Ask questions. If you don’t ask, they won’t go into the deepest details to answer your question.”

“I wish we would have taken more time training to learn the minor details.”

“Pay to have it implemented.”

“As the leader of the company, you need to be all-in on the transition, actively engaged, and going through it side-by-side with your employees. Keep the outlook positive when things don’t come as easily on the new software at the beginning, and continually point out the ‘why’ behind the transition. Keep the vision of a system that does the things you need it to at the top of your team’s mind while they are struggling in the weeds. It will make all the difference in attitude and ultimately in the speed with which your team will learn the new system. Don’t assume that all the features you are using in your current software are available in newer software. Verify items that are important to you before upgrading.”

“Try every scenario you can possibly think of on their demo system before committing.”

“Have 15-20 absolute must-haves, then get them in your contract before you sign.”

“Involve everyone in the company who uses any part of the ERP including you, yard staff, and drivers.”

“Ask a lot of questions about how to obtain the info and reports you need. Also, do not underestimate the importance of practice with the new software for all employees from owners, to the floor salespeople and everyone in between. A new ERP is useless if you and your staff don’t have a working knowledge of how it works and tracks data.”

“Keys: invest in training, and clean the database.”

“A) Get a full understanding of how the new systems, processes, and workflows actually work for your users. Find the differences in those processes to make sure you can incorporate them in the training on the new system. Also make sure the new system can handle the load of all the users using it at the same time (bandwidth). B) Clean up data before your new vendor imports into the new system.”

“The sales pitch is not the reality of how the system works. Find a dealer using the system and visit them. Talk to employees in different areas of their store.”

“The accounting side gets underestimated and needs way more attention pre-implementation.”

“Have a written process for every step of operations.”

“Train, train, train your staff then cross-train.”

“Have a test period fully operational for several weeks so everyone can use and become good at using the new software.”

“Selection will vary significantly depending on your needs and in-house capabilities. We want a system with strong data mining capabilities but also full access to the data for anything we need to do outside the system. Look for integration with other software you use to save transaction time and also a vendor that is strong in mobile and web- based access.”

“Do the transition during a slow month in winter when your order file is thin. Set up a team of people to assist with the conversion, people from sales, accounting, payables, receivables, purchasing, marketing, IT, etc. Make sure to check off all the prerequisite boxes before going live, and make sure your sales team has had plenty of practice transacting sales on the new platform before going live.”

“Having a qualified representative on site prior to, during, and after you go live to address any issues that may, and will, go wrong.”

“Watch out as probably everything has been told is either untrue or mis-represented. Heavily leverage payment with actual deliverables and performance.”

“Clean up all your data you do not need to convert, work closely with the software company you are going to upgrade to and follow their suggestions. This makes the transition easier. Make sure all employees are trained on the new software, so when you begin your first day of business it is less stressful.”

“We did upgrade five months ago—the thing I would have done differently was not try and bring seven stores live at the same time because it was difficult to address all their problems at the same time. All-in-all we are satisfied with our new software, but still have a few bugs to work out.”

“Do not hire those who are not computer literate.”

“The Institute of Managerial Accounting published an article on the cost of quality. The premise being that investing in quality pays a higher return on investment. Keep that in mind when selecting an ERP and budgeting for the implementation.”

“It’s hard to know what to ask when looking for software you will have for multiple years to come, so ask others on the same software before, during and after you buy in!”

“Completely commit yourself and your staff to the implementation. Develop an order of operation prior to going live.”

“We moved from a green screen legacy system to a state-of-the-art system in March 2017. The challenges are still fresh! The implementation team from our vendor said we were well-prepared. We reviewed our entire data base and cleaned it up…inventory, customer accounts, vendors, pricing, the whole works. We were a beta site for our vendors’ training module and assigned staff modules to complete with rewards. We invested in on-site one-day training for all of our counter staff and invested in enough vendor staff on site for four days after go-live to help at each location (we have three).”

“Preparation! Capture your needs and improvement goals to research in new ERP systems.”

“Make time to train your team. Set them up for success. Nothing is more frustrating than trying to learn a new system. When everyone learns how to operate the new system on their own, it leads to a lot of inconsistencies that have to be corrected in the future.”

“Go in with eyes wide open and do not set unrealistic expectations. Over-communicate the need for, and projected advantages of the new system. Plan very well and ensure commitment across your teams.”

“A) spend time on cleanup, setup, implementation process to get maximum results. B) no such thing as a ‘smooth conversion.’”

“Software sales folks tell you what you want to hear. They will disguise the limits of their software by pumping you full of the positives instead.”

Responses from wholesale distributors and manufacturers

“Buyer Beware! Recognize changing ERPs impacts customers and employees and poses a giant risk to your company. Know what you’re getting and train, train, train before conversion. It’s hard to change directions after conversion. We should have postponed rather than proceeded with conversion during the COVID-19 shutdowns. We did not have enough knowledgeable people onsite from our software vendor. We’re still cleaning up mistakes made during the first month and have numerous issues to resolve and problems still occurring daily. Six months after, our company is grappling with how to restore business functionality. Every department has problems. The old system that all were ready to replace never looked so good as it does now!”

“Total buy in from top management is key to getting the rest of the team on board with such an undertaking. Allowing plenty of time for training prior to going live with a new system. We even did some training on Saturday mornings to keep everyone focused. That cost a little more upfront, but if you hear the nightmares from companies that were not prepared, the cost on the back end could be way more than that. Having a dedicated system administrator (either a person or a small team, depending on the size of your company) is also key to lead the training and implementation process. Spend the money and time up front to get it right on day one.”

“Do not overlook your inventory setup. This is the single most important function. If the inventory is not implemented properly everything else falls apart.”

“Do your independent homework. Do not rely on information or data represented by the ERP supplier alone. Seek contrary evidence and right size your solution.”

“Be sure to understand how reporting from the ERP system can flow into sales reporting using add-ons like QlikView with a Salesforce.com CRM. The ERP system is often chosen by the operations and finance team, with little regard for sales reporting and management. Some of this is starting to change as the need for e-commerce is greater (especially order online, pick-up in store) functions.”

“I’d tell the dealer to abandon any thoughts they have of making their new system look and/or behave like their old system. Instead spend their time training their staff on the features, advantages and benefits of the new system.”

“Begin training three months in advance. Test every process to make sure it works for you.”

“Use a ‘play’ system to practice for at least 90 days prior to going live and ensure your team has really used the play system.”

“It is important to have the support and commitment from all those effected, to truly have a smooth transition.”

“Do your homework and talk to similar companies who have recently converted to new systems for advice and possible issues. Make sure your various departments are on-board with the new system before the selection is made.”

“If I could go back four years during our implementation, I would focus much more on the inventory setup. I would also run the testing longer and more in-depth. We spent too much time on the Sales Order and Customer Service aspects of the change.”

“I would highly suggest doing this transition in the winter months and start with a small portion of your locations if possible. You don’t want all locations going live at once, gives you time to work out the bugs and make the transition smoother. Make sure you have one of two super users per location so they can assist others with training and questions. I would also suggest having online tutorials that your staff can use to learn at their own pace ahead of any go-live date.”

“Ensure we have the resources to commit to the transition as it is almost a full-time job to pull together all the data into a new system. Dedicate a team to focus and prioritize, don’t expect them to make this just a part of their already full workload.”

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