Part 2: Are You Trying to Steer An Old Ship Or A New Ship?
It matters. You want to be steering the new ship.
By Exceptional Software Solutions, LLC
Dan Engle definitely knows about financial discipline. He has served in the roles of general manager, COO and CFO over his amazing 42-year career. Dan is currently the CFO at American Torch Tip, a Florida manufacturer of metal cutting supplies for welding, laser cutting and plasma cutting. American Torch Tip is a third generation, 75-year-old company that supplies other companies like Fastenal, Grainger and Lincoln Electric. We at ESS are fortunate to work with Dan and American Torch Tip to provide consulting services for their new Macola 10 system implementation.
In part one of our conversation with Dan he outlined the organizational posture firms should take when purchasing an ERP system. In this post Dan shares insight on why they should and advice on ensuring both a successful implementation and “organizational love” aka software adoption.
ERP or NO ERP—that’s the question
We asked Dan a simple question—Are companies making a mistake by not using Macola 10. Dan gives an emphatic “yes”! His answer – an emphatic yes! (He said YES so loudly and confidently that we had to turn the sound of the phone down. That’s just how much he believes in the power of the system!)
Businesses grow incredibly fast after implementing an ERP – Dan Engle, CFO American Torch Tip
Both Dan and ESS always hear the top objection—“it’s too expensive and we don’t want to change right now.” Dan describes it as a pay now or pay later situation. He says there is such a tremendous benefit in cost savings that companies shouldn’t think twice about implementing an ERP.
Many companies use individual non-integrated modules that pass data to a general ledger. Dan says that’s hard to do correctly to minimize error and rework. Users of the system then start asking if their inventories are accurate and if their purchase orders are accurate. Dan says POs are a great example. Many non-ERP systems require work done inside and outside the system, and when you work outside the system, you have POs that remain open and never get closed. With Macola 10, there’s no such thing as working outside the system. Businesses lose a lot of money when they can’t fulfill an order because they thought they had the parts. Then everyone is scrambling around to do rush orders or looking around for parts.
Dan says the flipside is true when companies invest in an ERP: “Businesses grow incredibly fast after implementing an ERP,” Dan says. “You can handle a much greater business level with the same headcount or even fewer people, and your customers see you differently—better.” Those companies that don’t choose ERP systems typically top out in growth.
Old Ship, New Ship
Dan uses the old ship, new ship analogy. On an old ship, the captain is out on deck and another sailor is in the crow’s nest looking for the enemy. In a new ship, no one is out on deck. Instead, they are all in the combat information center inside looking at radar to assess threats and decide on actions. What if they misread a blip on the radar screen? It’s really an airplane but they think it’s a missile. His point is that you’ll get accuracy with an ERP system—with Macola 10, you’ll look at your screen, you’ll know the data are correct and you’ll make your decision knowingly and comfortably.
Dan Demands Discipline
Dan can’t stress enough how important it is to fully and accurately set up your ERP system and to maintain the underlying components. He has seen many companies fail to do the required system maintenance. “They end up with garbage coming out of the system and they make wrong decisions,” Dan explains.
Dan gives one simple example of a customer marked as paying every 30 days but who really pays every 60 days. Having that wrong in the system affects the cash flow.
The maintenance aspect is not fun for anyone and it does require discipline. Dan uses a personal analogy to make the point. A self-described couch potato, Dan one day decided to do something about it. He walked into a marathon clinic; they told him he’d be able to run a marathon in nine months.
And he did. He ran his first 5K at 3 weeks and half-marathon at 12 weeks. He was ready and did his marathon at the nine-month mark. BUT, it required tremendous discipline on his part to get there. He ran up to five times a week—consistently.
Dan says ERP systems require the same discipline. They’re not “set and forget”. Using a phrase from the Godfather movie, the team has to “go to the mattresses”, meaning they have to stick together, maintain the system and take care of it. Dan says once you’ve acquired the discipline, the benefits far exceed the time you put in.
And just like in his marathon journey, there are ERP rewards along the way—like an accurate inventory and not having to talk to angry customers wondering where their shipment is.
Dan’s is pretty adroit at emerging technology but not all CFOs are early adopters of new tech. That’s why its important that every CFO have the cell phone number of a team whom he or she can talk turkey with and be trusted to be fully relied upon.
“I needed a deployment team with ERP experience and someone to do the features that I was less knowledgeable about,” Dan explained. He says the team at Exceptional Software Solutions, LLC fit the bill for several reasons:
- Technical skill of installing Macola 10 on servers and maximizing the core functionality
- Work on the “flashy points” that he doesn’t know, like workflow processes and Synergy
- Troubleshooting the setup to make sure everything is working properly
He also says that it is important and cost effective not to hire a consultant to fix all the things you broke just because you didn’t do the required maintenance. ESS can certainly do this work, but Dan says to think of them as your marathon coach. In that role, you want ESS to help you maximize capability and forge forward.
Dan says his team is still working on implementing certain core features of Macola 10 and when they’re done, they’ll move into Synergy. ESS will be the first phone call he makes.
Listen to Dan.
He’s a CFO, Macola expert and marathon runner. What more could you ask for? If you haven’t made the move to Macola 10, now is the time—you’ll reap the benefits and the cost savings. Once you get that ERP, take care of it and put in the time and discipline required to keep your system running at peak performance. What are your next steps? Pick the top five things—not just one thing--you want your ERP to do. Call ESS to help you purchase and implement Macola 10. Once you have it, be disciplined. As long as everyone stays in shape and has the discipline, you can all run a marathon with Macola 10 to help you.