What the Duck?! Episode 39 Transcript
FINDING SYNERGY WITH YOUR ERP: How to Successfully Implement a New or Existing ERP with Paul Tedford
Welcome to What the Duck?! A podcast with real experts talking about direct spend challenges and experiences. And now, here’s your host, SourceDay’s very own Manufacturing Maven, Sarah Scudder. Thank you for joining me for What the Duck?! Another Supply Chain Podcast brought to you by SourceDay. I am your host, Sarah Scudder, and this is the podcast for people working in the direct materials part of the supply chain. I’m @SarahScudder on LinkedIn and @SScudder on Twitter. If you are new to the show, make sure to follow this podcast so you don’t miss any of our direct materials supply chain content.
Today, I’m going to be joined by Paul Tedford. He’s kind of a celeb around the SourceDay office. This is my first time actually chatting with him, and we are going to discuss how to successfully implement an ERP if you work for a manufacturer and want to upgrade your existing ERP or install a new ERP. Then, this episode is for you. Paul’s passion for customer advocacy and solving new and challenging problems allowed him to take on many different roles in the ERP space and most recently become CEO and partner at Synergy Resources. Welcome to the show, Paul. Thanks for having me on, Sarah. It’s a pleasure.
So, I… I was the recipient of some pretty swanky cowboy boots, so I need to hear about these. I only saw a photo, so I never knew you could make cowboy boots out of ostrich skin, first of all. So, thank you to the SourceDay team for giving me some my first cowboy boots. They’re beautiful. I’ve finally broken them in and getting used to wearing them. So, thank you. It’s a big surprise. Are you wearing them today? I am not, unfortunately. Okay, I should… We should have pre-prepped so you could have modeled the cowboy boots. Yeah, yes.
So, Paul, let’s go way back in time, many years ago, and I’d like you to start by sharing how you got your start in manufacturing. It goes back to college. I really didn’t know what I wanted to do, as I went to college to be a veterinarian, if you can believe it. So, within two years, I realized that wasn’t the right track for me. I decided to pursue a minor in business and wanted to do an internship. However, I also needed to work two jobs to put myself through college.
During the school year, I worked at a company called Final, which was conveniently located down the road from the University of New Hampshire in Newmarket, New Hampshire. They specialized in manufacturing in-ground pool liners for retrofitting gunite custom pools. My role involved 3D CAD design for designing those pools. However, during my time there, while still in college, they made the bold decision to develop a homegrown ERP system on an Apple platform using FileMaker Pro. At that time, there weren’t many web-based or Apple-based ERPs available. It was a challenging project, but also exciting, as I was involved in implementing costing and material planning.
During summers and winter breaks, my dad had me work at his company, a Can Company in Peabody, Massachusetts. Unfortunately, that business has since relocated to China. In the summer, my dad wanted me to gain hands-on experience on the shop floor, so I worked there, assisting the manufacturing lines. I operated forklifts and packaged cans. Admittedly, I made a few mistakes, including accidentally knocking over around ten thousand dollars’ worth of equipment during my first week on the job. It wasn’t a great start, but I improved over time. During the winter, I helped in the office, particularly with implementing their ERP system, which involved working with five and a quarter-inch floppy drives.
So, those were the two jobs I had during college. They provided me with exposure to ERP systems and introduced me to the manufacturing industry. I loved it, the people, and I truly believe it’s the heartbeat of our economy.
So, you graduated from college. You liked manufacturing and ERP, so it stuck when you started your career. After graduating college, what did you struggle with the most? Being a student is very different than being on your own. The biggest struggle was knowing where to go in my career. I knew I loved manufacturing and technology, and that was really fun and new at the time. So, just understanding where it goes. Luckily, I put my resume into Lily software, which is the original creator of Visual, and they had a technical support opening. So, I worked in tech support, learning SQL programming language and how the products work. That was difficult, but I was also a pretty shy kid. So, being able to talk on the phones and build rapport with office mates, I think that was probably the most important thing I learned in college, how to build rapport and have some fun. It carried over to the first job I had and made a lot of friends there. I think that was the launchpad to my career.
What did graduating from college mean to you? When we were prepping for the show, I know this was something really special and important to you.
Graduating college was obviously what your parents expected you to do at the time, especially my dad. So, it meant that I didn’t disappoint my dad. That was good. But I learned quite a bit at college. The biggest thing I really learned was how to be on my own, how to set my own priorities, manage my time, and be in social situations. I don’t really use much of what I learned in college for my degree today. There’s a little bit about learning how to read a P&L and balance sheet and stuff like that, but most of it was just learning how to live on my own and the social aspect of living on campus. Graduating from college was something I was proud of, but the experience of being there was more important.
Throughout your career, you progressed quickly and eventually became an operational and technical consultant, helping customers implement ERP. Could you share what an operational and technical consultant does? This might not be something that a lot of our listeners are familiar with, right?
So, right after Lily Software, I joined Mark Lily’s and Gene Caiola’s Group, which eventually became Synergy Resources. One of the first roles they had me in was technical consultant, which involved things like data migrations, report writing, and operational consulting. While I had some experience with operational consulting, it’s not as much experience as most of the other consultants that work at Synergy. They have either held roles as CEO of companies, VP of operations, or worked in manufacturing for a long time. The knowledge they have gained from being in situations, problem-solving, knowing what processes work, and what the best practices are, and then being able to move them over into the software, is what the operational consultants do. They look at what the goal of a project or a continuous improvement workshop is, and they say, “Okay, maybe the goal is to improve material or a supply chain, or maybe the goal is to improve scheduling.” They have the experience not just with the software but also from where they worked before in manufacturing. They have probably done over 100 implementations, and most have done well over a thousand implementations. So, they understand the nuances between each industry and what those best practices are by industry. I think an operational consultant is somebody in our company that can help you with any manufacturing-based process or software problem or a combination of two and provide not only how to fix it but also best practices and the processes that work at other similar companies like them. Some people cringe when they hear the word consultant, especially if I’m working for a smaller mid-size manufacturer. I’ve got a small budget. I just think expensive. I think this person is going to come in and have all these reverse things that we’re not actually going to be able to do. So, why should a manufacturer actually consider hiring an ERP consultant? What are some of the benefits? Yeah, some people have different journeys. We always say one of our values is customer satisfaction, and that seems like a value that everybody has, but one of the behaviors is meeting customers where they are. We have a lot of customers that have implemented it’s the first time they’ve ever implemented an ERP. They’re coming off QuickBooks, maybe they’re just coming off spreadsheets. They’ve never implemented an ERP, and if you’ve never implemented an ERP, it touches everything in your company. It touches everything from sales to operations, as we talked about material planning, shop floor finance, quality engineering, you name it, right.
So, if you try to do that on your own and you’re trying to put in place best practices learned across, as we talked about, many other implementations and learning what works at different types of companies, it can be difficult, especially the change management aspect of it, the best practices, the right processes. But not only that, is that you’re trying to marry up those processes to the software. So, you take your current state, your desired future state in the beginning of implementation and you need to set the system up, the preferences, the configuration, the settings to support what those processes will look like in that desired future state that will meet the KPIs or the business goals the company has. So, if you’ve never done an ERP implementation, you really do, unfortunately, need to hire a consultant to do that because it’s going to cost a lot more in the long run if you don’t. And even people that have done multiple implementations usually don’t pick the same ERP or sometimes they, a lot of our customers come from referrals or they’ve been using Visual One company the other one, but a lot of times nowadays, people are moving to a cloud ERP, and there are some differences there. So, you’re probably going to want a consultant there as well. Paul, I think a big one that you didn’t mention is preventing burnout with your existing staff. All of the people that I know that work in manufacturing and supply chain are maxed out as is. They are working crazy hours, trying to get things done, scrambling, you know, nights, possibly weekends. And if you add on an ERP implementation to an already overburdened staff, I feel like you’re going to burn out your team, and people may quit and not be able to handle it. So, by bringing in a resource, you’re making sure that your team is not becoming overwhelmed. Yeah, excellent point, Sarah.
We’re expecting the last three to four years, right, where the labor market is tight, people are working with lean environments, and we absolutely see that. And sometimes that’s the reason why people can’t put an ERP in at all is they don’t feel like they have the time. So, there are different levels of implementation support you can get, either you want to do a little bit more of the project or you want us to do a little bit more of the project or whoever your partner is. So, that’s a very good point, and absolutely, we see that in every single implementation. And you touched on this briefly, but I want to just state it again. I think working with a consultant to help with an ERP implementation or if you’re upgrading, you can actually save money. There are many instances that I have seen where a company tries to manage it in-house, something goes wrong, and they spend double or triple their budget. And had they just gone out and hired a consultant and done it right the first time, they wouldn’t have gone so far over budget, and they actually would have saved money or come in at or under budget. So, there’s actually a pretty big cost savings factor as well that I think is important to think about. And it is, and that comes with the long-time experience of multiple projects and what works, what doesn’t work.
Absolutely, yeah. So, Paul, the focus of our conversation today is really around what manufacturers can do to implement an ERP. There’s like you mentioned, people that are on spreadsheets, people that are on QuickBooks that are looking to implement an ERP for the first time, or some of our listeners may be on what I would call an antiquated or outdated ERP, and they want to upgrade. So, what are some tips that you can share that a manufacturer can do to have a smoother and more successful ERP implementation? That’s a very broad, big question, but maybe you can hone in on a couple of key things that people can take away from this discussion today. Sure. I think it all starts in how you get ready to select an ERP, how do you get vendors involved, how do you make a decision on which one to go with, what’s the process you go through with that? So, I think a lot of companies sometimes will go to outside selection consultants, which are great, but sometimes they’ll focus on every single thing you need. You know, “I need order entry, and it needs this field.” And if you get stuck on that minutia, you know, most ERP systems have order entry. You might have special pricing that you have to make sure it works, but most of that order entry, most of that shipping, most of them have purchase order entry. So, what is the one of the reasons, what are the goals of this project for you, and focus on the features that are going to allow you to realize those goals? So, a lot of our customers, when they’re starting to look at software or the reason why they’re implementing, part of it’s efficiency, of course. So, having all their data in one system, having one process that flows through, and you’ll want to look at the ease of use, how efficient is the system to get around, making sure you’re not re-keying data in, this automation, things of that nature. But then there’s usually some other reasons. It’s in a manufacturing company specifically, it’s making sure they can improve on-time delivery to their customers. So, what does that entail? That entails good material planning, it entails supplier portals, it entails things like a good scheduling, the shop floor solution itself. So, if that’s one of your big goals is on-time delivery, how is the system going to help you get the right materials at the right time, at the right price, or the right quality? And then how is the system going to allow you to improve your actual lead time?
So, you’re making your customers happier, which, you know, at the same time as improving your on-time delivery and maybe even at the same time as reducing overtime or even shifts. Because we have customers that will implement an ERP and their goal is scheduling, but they realize that because the data of the system can give them, they know where to apply overtime, why not to apply overtime, because they know what their true bottlenecks are and what’s going to actually move these orders through, increase throughput, basically. So, it’s really what the goals are. Some companies will implement an ERP system so they can close their month-end in a day, right? So, it just depends on what your real goals are. You want to make sure that they’re the focus of the selection process, meaning you focus the demo on your key three to six goals. The rest of it, over the navigation, you’ll see in any demo, but really focus that agenda on what’s going to change your business for the better. And then I think the other thing during the selection process to do is meet the consultants. The software is only 40% of the equation, as we’ve been talking about.
The reason why most of our customers get the benefits they do is not just the software, it’s the consulting and the experience behind it, the best practices. So, you want to meet those consultants, how much experience they have, do they experience in your industry, with the personalities, things of that nature. You want to meet those consultants and make sure that you explain where you’re on the ERP journey. Is this your first one? Have you done multiple ones? Do you need more help? Have those conversations. A good partner is going to be able to put a good plan together based on that. They might phase it in or they might do the Big Bang approach. They might recommend different options for you, so you’d want to work with a good partner based on that. And really, the key is what are the business goals in the company? So, Paul, I would argue that the most important aspect of an ERP implementation, of course selecting an ERP that can solve the problems that you have, in picking the right consultant partner, is the change management piece. It is. I know organizations that have spent millions and millions of dollars buying an ERP, trying to implement an ERP, and it actually never gets off the ground because they did not have the right processes in place for change management and their teams would not adopt and use the system. So, what advice do you have for people that are maybe listening to this and are struggling with change management? They don’t know how to get their teammates to actually adopt and use this new ERP or upgraded ERP. Yeah, that’s a great point, Sarah. So, I think change management all starts with executive sponsorship of the project as well. If your executive team, especially the CEO, president, founder, isn’t behind it, it’s going to be really tough to have a very successful project and have the change management focus that’s needed to have a successful project. So, I’d say that’s the first thing. You also want to make sure that you’re not just relying on the vendor’s project manager. You want somebody else out of that executive that is your internal project manager that can help drive that forward and make sure the change is happening. But there are other change management strategies that you can put in place before with the key stakeholders of the ERP project. For example, one of the things that we’ve recently done has become DISC certified in the last two years, so we’ll do DISC assessments. So, for those who may not be familiar with that, what is DISC? DISC is like a personality traits, how you work type assessment tool. You know, are you a direct person or a supportive person? Do you just like to make people feel comfortable around you? Are you very in the details?
So, it’ll assess everybody in your team and tell the other stakeholders on that team how you can work better with each other and work through each other’s strengths and understand, you know, maybe the differences between the different personalities. And it really does help you get ready for a project like this because it teaches you not only how to work better with your people on the project so it’s a better success, but it gives you some other change management tactics to employ for the team that’s part of that project. So, we just kicked off a project with a company out in the Midwest and the DISC is only like a couple of days of the project, right in the beginning, or a couple of hour sessions, not even days. So, there’s a self-assessment that you can do online, and that’s pretty quick, and then we come in and do training about what the results are of the report. We had the management team and the implementation team because they wanted to have all of them do the DISC training. In about a week after that, the CEO, Eric McAleXander, he sent me and the person that did it an unsolicited email saying, “We know how to work together so much better than we ever did before, and this is going to help us not just with change management for this project, but for any project. Thank you. We learned more about our business and ourselves in this first week of the kickoff than we have in years.” So, those are the kind of things that make us happy, right, when we hear those kind of comments. But those are some of the things that you can do around change management. But again, it starts with executive sponsorship and a good internal project manager. And I would add to include the stakeholders in the process. If I sit in accounting and nobody ever asks my advice or feedback for a year and then you throw a system at me and say, “You have to use this,” I’m probably not going to be as open and willing as if I would have been if somebody had asked my feedback and advice and got my input throughout the process. So, seems very simple and basic but really, really important in that change management process. Absolutely, Sarah. We usually have six to eight stakeholders on a project, the different areas of a company, and you definitely want to have them in the whole selection process and the demos, deciding on it together. So, absolutely, you need that buy-in to make sure that change management happens. Yeah. So, Paul, some of our listeners, we just talked about things to do when you’re implementing a new ERP, but we also have listeners who have an existing ERP that I call that is antiquated or maybe becoming a dinosaur, right? Time for an upgrade. How does somebody know when is the right time to upgrade their ERP?
Yeah, another great question. So, I think there are a lot of answers to that. There are a lot of different ways to go to talk about that one. So, there’s that technical aspect, right? So, we’ll start with the easy one, the first one. So, it’s when you have business pain. Your current system can’t help you with where you want to go, whether you can’t get the reports out of it, you can’t get to the business goals around either a supply chain scheduling, finance, whatever they happen to be, and your system’s just holding you back. You’ve changed as a company, new people, new processes, new products. You’ve changed over the years, so maybe it’s time for a new ERP. Now, that one’s a touchy subject because when we go into those companies, even if they’re not using one of our ERPs, sometimes we just tell them it’s not the ERP, it’s your process. It’s the hero pod would do what you wanted to do, and that’s maybe 60% of the time, actually. So, sometimes they still go forward with a change, sometimes we help them with just, we’ve actually told companies, “Don’t get a new ERP, let’s just help you with the processes.” So, we’ll do that as well. So, that’s the first step. Then the second one you mentioned, dinosaurs, right? So, then there’s the technical, technical aspect, and that really gets into security, how much time you have to have full-time technical staff working towards keeping the service up, things like that.
So, then you might want to consider cloud, not just for the security reasons I just mentioned, but also to make sure that your technical folks are not doing those mundane server room tasks anymore. They’re doing things that are value-add, like let’s get the data the way you want it, let’s set up workflows for automation, things of that nature. So, I think the right time to upgrade your ERP is either when you have a business problem or a technical deficit that you can’t overcome with a current ERP. So, those are the biggest two reasons that we see people upgrading the ERP. And then there are the ones that are coming off spreadsheets and they just need efficiency. So, any ERP would probably help them, but that scares me when you tell me that someone’s managing their business in spreadsheets. Okay, makes my heart rate race very fast. It’s amazing the ingenuity manufacturers can have that get it done attitude, right? We’ve talked to companies that are $40 million in revenue that don’t have an ERP system running on spreadsheets and QuickBooks, and it’s a lot of hard work.
So, that depends on if you’re on a cloud ERP or you’re on-premise, right? So, a cloud ERP, usually what most of the publishers are doing nowadays, like Acumatica, for example, or N4 Cloud Suite, they’re basically putting out updates either once a quarter or twice a year. And then they can hold you can actually hold back when you want to take those new features because if you introduce new features into your current process, it could break things that you’re doing now, right? So, in those cases, you’re not worrying about buying a new server, you’re not worrying about cleaning data, and maybe you are if you’ve used it for a long time, but typically you’re not worrying about cleaning the data.
Yeah, no, we get it. I mean, we still get inbounds. You know, most of ours are on QuickBooks, not necessarily on spreadsheets, but still at some point, when you reach a certain volume, you know, QuickBooks can only do so much. One more question about the ERP upgrade. So, how long should somebody expect an upgrade to take? Right, you already have the system implemented, but it’s not something that happens overnight. And I think sometimes people will miscalculate the time involved in actually doing an upgrade, even though you already have that product installed. It doesn’t mean it’s a super fast and quick process, right? You’re not worrying about manually installing a new version, running upgrade scripts because the cloud vendor is doing all that for you. What you are worrying about is how it’s going to change your current processes. So, you need to spend typically three to four weeks running through your current state processes and making sure they still work. And then looking at what’s coming new in the software and do you want to implement those new features to improve some of your current processes. And then test out those processes in a pilot or, you know, kind of like a user acceptance test.
So, that’s with cloud, that usually takes, you know, one to three weeks to do that testing because you want to have everybody that had to change the software, which is in an ERP system, that could be almost every part of your company like we talked about before. You want them going through those tests. The actual time it takes to upgrade is zero minutes. It’s just the testing of the new features and everything works, right? So, that’s the cloud. When you’re on-premise, you have that same thing. You want to test the new features, make sure everything works, but then you also have to check to see if your server needs to be updated, unless you’re hosted in the cloud with a perpetual license. And then you have to also see if you want to do data cleansing. Companies that haven’t upgraded for many years, because if you’re on-premise, you can decide whenever you want to upgrade. So, you might have had your last upgrade seven years ago. Again, your business has changed, you want a different chart of accounts, you might want to cleanse that chart of accounts and make sure it’s right for you going forward. So, that can take a little bit longer. So, an on-premise install could happen over a weekend if your processes all work and you don’t want to test, which I don’t recommend, or it can take four to five weeks. So, that’s typically what an on-premise at the far end six weeks, right? But, you know, some of our customers want to take longer to test, which is fine, so it could take two months.
So, my friend Susan Walsh is the classification guru, and her tagline is the fixer of dirty data. So, she started her own data cleansing company a few years ago, and the highest volume of work that she receives now, it could change this year, but is people either implementing a new ERP or doing an upgrade because what they want to do is clean up the data before they input it into a new or upgraded system. So, I think getting your data clean is so, so important. And then you’ve got the next component of keeping that data clean. So, once you input that good data, how do you maintain its accuracy? Absolutely 100%. So, you know that is the master data, right? Where you have all these parts that say do not use in front of them. Let’s get rid of those, same with customers and vendors. But then, it comes into again back to the process. If you want to do supply chain improvement and measure your suppliers, you better have a process where your users are putting in the promise date, the when it’s going to be received in. So, MRP supply portals, things like that work.
So, sometimes it’s not just cleaning current data, it’s making sure the process supports the goals for that operated systems as well. So, Paul, we, me, and my team at Horse Day have worked with your crew at Synergy for a very long time. You guys are an awesome partner, and you were recently promoted to CEO. So, I would like to have you get a little bit personal and share what that means to you to have moved up to the ranks and actually take that top position, right? So, that’s a good question. The personal aspect of it is that when I was going through college and put myself through college, I just wanted to make a little bit of money, enough to support a family. So, I didn’t really have these career aspirations. It wasn’t until I got into manufacturing and technology and said, “Wow, this is so cool. You can do these things.” And I just wanted to solve people’s problems, help them with tips and tricks. And then being that customer advocate allowed me to get into doing demos of the software, you know, things of that nature. When you get into that and helping people, that was really what the goal was. So, it wasn’t just helping our customers, it was also helping the team members at Synergy.
So, it’s all about, and I’ve had a lot of help too, right? So, Mark Lilly was one of the original founders of Synergy, Gene Caiola, Mike Canty, there’s a whole list of people that have been my mentors. So, being able to learn from them, their experience in manufacturing, being able to learn from our customers, being a team member, it just allows us to always, you know, kind of look at that next level. How can we help more? How can we help more? And that’s just how I think. That’s how it was. It wasn’t any aspiration of being CEO. It was just, hey, how can we help more? How can we make sure our customers are getting improved business operations and improved business results? And then also, the fellow team members at Synergy.
I mean, it’s been working with them, supporting them whether they needed a demo to learn how to use it. I always stepped in for those types of things. Whether I needed them to teach me how to write a SQL script a different way with unions, and I didn’t know how to do it at the time. So, I think being promoted to CEO wasn’t really an aspiration of mine. It was just really something that a lot of hard work individually, but mostly with a team of great people, has helped grow. It’s helped us grow the company, which has opened up other opportunities for us to serve more customers. For people in our company to have career paths that they want to pursue as well.
So, what does Synergy do that is unique that nobody else in the market offers?
Yeah, so it’s funny. When we go into manufacturing companies, the first thing we hear typically during a sales call is, “Your ERP might not fit us because we’re so unique,” which is usually true because they have a unique team, every individual is unique, and they probably have a couple of unique processes. But the best practices for each micro-vertical, 80 percent of that will work or not. 85 percent of that would probably work for most companies in a similar vertical. So, I struggle with that a little bit because I feel like we’re pretty unique, but we look at what’s going on around us, and we’re always improving. So, it’s probably easier to answer that question of what we do.
We help companies choose the right ERP. So, the first thing is that we offer three different ERPs, and a lot of companies are selling the only ERP they have. So, they’re not looking at your business goals, business needs, where we can actually look across the three ERPs and say what’s the best fit for what you want out of this project, what you want out of the software, and the implementation.
So, Paul, I just want to pause there for a second for our listeners. When you say we offer three ERPs, you mean you are a reseller of three different ERPs so you can assess your customer’s needs and recommend an ERP.
Correct. Yeah, saying it better than I do. Yes, and what are those three ERPs that you resell that you offer to your customers?
Yep, so we have two Infor products. One is Infor Visual, which is an on-premise solution that can be hosted, and then there’s N4 Cloud Suite Industrial, which is a little bit larger, you know, for a little bit larger size companies. It’s cloud multi-tenant cloud public cloud, but it can also be on-premise in the same code base. And the third one is Acumatica ERP, which can fit into manufacturing but also distribution and a few other industries as well.
Yeah, okay. Well, Paul, thank you for discussing how to successfully implement an ERP with me today. Where would you like to send people to find you?
Sure, I think the easiest way to find us is at synergyresources.net on the web. And you can also find me, Paul Tedford, on LinkedIn and Lean Manufacturing, or at lean underscore manufacturing or MFG at lean underscore MFG on Twitter. So, and so just a reminder on that call-out, it’s dot net.com for their website.
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I’m It’s @SarahScudder on LinkedIn and @SScudder on Twitter. This brings us to the end of another episode of “What the Duck?! Another Supply Chain Podcast.” I am your host, Sarah Scudder, and we’ll be back next week.