In part one of this series, we looked at how ERP implementations are evolving from the ‘big bang’ approach to rapid, blueprint-based implementations following agile principles. Here we look at two examples of companies implementing these Agile ERP approaches.
Examples of Agile ERP Implementation
NetSuite’s SuiteSuccess methodology is a good example of an Agile ERP implementation approach. Here we look at two examples of firms that have used SuiteSuccess to achieve quick time-to-value and ongoing improvements.
Wittek Golf Supply Company is a 70-year-old firm that is both a distributor and manufacturer of equipment and supplies for owners of driving ranges, golf courses, miniature golf courses, and golf shops. Their vision is to be a ‘one stop source’ for their customers. They carry about 8,500 SKUs. They manufacture and assemble a small number of those products, but those few products they manufacture account for about half of their revenue.
Wittek had outgrown their legacy financial system. Even though they are a relatively small business, they have many of the same complexities in their warehouse as a larger business, such as increasing amounts of drop ship requirements1 from their customers, and the need to handle intense seasonal peaks. After evaluating several products, Wittek selected NetSuite, in large part due to its flexibility and the simplicity of configuration. Many of the adjustments they needed could be done by simple configuration changes, rather than having to write scripts.
They began implementation in August 2015. Wittek was one of the first customers to use NetSuite’s SuiteSuccess program. That enabled them to use the preconfigured process flows for most parts of the system, identifying just a few areas where they needed to customize.
Data cleansing took some work. The company hadn’t really had a digital catalog before that. And there were plenty of data issues that needed fixing. They used Excel to clean up their data and NetSuite’s built in tools to import it (the project leader said “NetSuite’s native importer is awesome”). They said that NetSuite’s community of users were very helpful in providing formulas and tips to speed up the data cleansing process.
As a result of using the blueprint approach, Wittek was able to go live in less than 100 days. They were able to achieve value immediately upon go-live. The system has brought process disciplines and helped them reduce errors in many of their processes, such as pick, pack, ship, leading to higher customer satisfaction. Now they are implementing ecommerce, where they expect to realize even more value from the system soon.
Lindemann Chimney Service
Lindemann Chimney provides both residential chimney services (such as cleaning, inspection, repair, and restoration) as well as selling commercial chimney supplies2 to other chimney service providers. They have four distribution centers for the commercial supply side of the business (Chicago, New York, Atlanta, and San Francisco). They also do some manufacturing in Atlanta. Amazon is a major channel for Lindemann—they are doing both Fulfillment-by-Amazon (FBA) and Fulfillment-by-Merchant (FBM). Lindemann carries about 7,000 SKUs, manufacturing about 20 of those themselves. They are expanding into B2C3 supplies and so expect to add another 20,000 or so SKUs by the end of the year. Their new website, integrated with NetSuite, is a key enabler of that expansion.
Lindemann had previously been using Magento for ecommerce along with a separate system as their financial system of record. That setup was not designed for fulfillment from the warehouse and they had problems with the integration between the two systems. Furthermore, they had five different instances of their financial system, one for each division. As a result, they had four employees just cleaning up and rekeying ecommerce orders into their financial system.
They looked at over half a dozen different ERP providers, ultimately settling on NetSuite. They replaced Magento with NetSuite’s SCA (Suite Commerce Advanced) at the same time replacing their financial system with NetSuite Advanced Financials.4 Lindemann was also an early adopter of NetSuite’s SuiteSuccess program. An important element for their smooth go-live experience was what happened before they selected NetSuite as the provider. Lindemann told us that NetSuite’s salespeople took the time to ask the right questions, really understand Lindemann’s business, and then came back with clarity about the recommended approach.
The implementation of the ERP portion only took six weeks. The website took another two months, primarily due to internal resource constraints on preparing and loading the large amount of data. Lindemann’s Director of Ecommerce, Dave Ullmann, said “I’ve been through a lot of software implementations and have never seen one go this smoothly. We were taking orders and doing everything the moment we went live.” He said this was possible because of NetSuite’s agile approach—persistence during implementation, with continuous touch points, refining, testing, fixing, and iterating again until everything was working. Ullmann also praised the stability of the system, saying that fixing and tweaking things did not cause something else to break, as frequently happened in his experience with other ERP systems.
With their old ecommerce system, importing data was a daunting task, since it did not have an easy import/export tool. In contrast, Ullmann said, “Importing data into NetSuite was ridiculously easy.” But they still faced the challenge of cleaning up data from fifteen years of errors introduced by systems that required rekeying of data from one system to the other, did not enforce policies or validate data, and thereby created dirty data.5 Their new NetSuite system enforces field restrictions (like only numbers allowed in a phone number field) and ensures well-formed data.6 NetSuite’s employee roles and restrictions are strong. Now with the built-in validation rules and the automated flowing of data between ecommerce and core financials, it has freed up the four employees who were previously doing rekeying and cleanup work. They can spend time on more value-add activities.7
For the service side of the business, Lindemann currently does estimates, booking, and scheduling of appointments using Salesforce.com. However, they are in the process of building out their own scheduling functionality using NetSuite. This is possible with the SuiteScript capabilities of NetSuite that make it possible to easily extend core functionality, while maintaining integration and forward compatibility.
The rapid implementation has quickly positioned Lindemann for their next phase of growth, keeping them ahead of the competition. They now have a native-integrated, easy to maintain/enhance financial and ecommerce foundation on which to continually differentiate and quickly implement new growth strategies, such as their new B2C supply business. They couldn’t have done it nearly this quickly without the SuiteSuccess programs and the agile implementation approach that NetSuite brought.
Conclusion—The Value of Agile
An agile, blueprint-driven approach to ERP implementations brings tremendous benefits:
Agility/Lower Risks—Internal and external business conditions change so fast that long implementations risk being off-target and obsolete by the time they are ready. By breaking projects into smaller pieces, companies can adjust direction and priorities as changing circumstances dictate. Their business is not hamstrung by a dated, hard-to-upgrade, incorrigible ERP system.
What to Look for in a Solution Provider
Marketing language tends to blur the lines between providers and makes it harder to distinguish actual capabilities. Everyone claims to have rapid implementation methodologies. Some things to look for:
• Average actual implementation times say a lot about a solution provider and their approach. Data from an independent source on this can be more reliable.
• Frequency and duration of business disruptions after implementation.
• Guidance given by the solution provider during the evaluation period—does the provider truly understand your business and industry? Are they acting as a strategic partner?
• Industry-specific blueprint approach—If the provider claims to have a preconfigured industry-specific blueprint, ask to see it and explore what effort will be required to make it work.
• Agile approach during the sales cycle—does the provider quickly turn around a demo of what the implemented solution will look like? Ask them what work will need to be done upon go-live to achieve what is shown in the demo.
Lower Costs/Better ROI—Long implementations are inherently more expensive. They consume more hours of consulting and more hours of employees’ time. Rapid implementations reduce the ‘I’ in the ROI. With big bang ERP implementations, it can be literally years before seeing a return on the investment. Long implementations also drain the time and energy of the company, creating ‘implementation fatigue.’ Rapid implementation helps sustain energy, enthusiasm, and momentum.
Value Achieved Sooner—Rapid implementation, done right, brings rapid time- to-value. The company starts using, learning, absorbing, and then improving much sooner.
Continual Improvement—Once the system is up, employees start finding more ways to use it to improve their business. With an agile approach, the benefits keep flowing, as improvements keep occurring at a regular
Incremental Funding/Success—Benefits, such as cost reductions or revenue gains, accrued from the early implementation can be used to justify and fund the next steps in incremental implementation.
Agile ERP’s time has come. Businesses that want to be agile themselves should embrace it now.
1 Shipping directly to the end consumer who has placed an order with one of Wittek’s customers. -- Return to article text above 2 Such as tools, liners, caps, dampers, fans, hearth products, masonry supplies, and so forth. -- Return to article text above 3 Business-to-Consumer. Today Lindemann only does B2B (Business-to-business) in the supply part of their business. -- Return to article text above 4 Lindemann doesn’t have a WMS system today (their DCs are run manually with paper-based systems), but they are looking at moving up to NetSuite WMS Lite. -- Return to article text above 5 For example, someone would enter something that is not a valid phone number into the phone number field, such as a note telling which line this was (like “Fax line” or “Support Line”). -- Return to article text above 6 For example, an email address field must have an @ and proper domain name. -- Return to article text above 7 For example, those employees are adding lots of rich content to Lindemann’s ecommerce site, to help Lindemann achieve their goal of becoming the ‘Wikipedia of Chimney knowledge.’ -- Return to article text above
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