How to create the foundation for the successful adoption of an ERP

Jake

I’m your host, Jake Jones, Multimedia Producer and Brand Influencer at Zone & Co, and I’m joined this week by Tylor Santos, VP of Engineering, and Joe Scavotto, Senior Director of Solution Consulting, both at Zone and Co. Guys, thanks again for joining us on the podcast.

Joe

Thanks for having us.

Tyler

Thanks for having us, Jake.

Jake

Adopting an ERP, or integrating your business into a new ERP, can be a daunting task. Setting up a good foundation is crucial to your business success. Today, we’re going to talk about some important things to keep in mind as you lay the groundwork for your ERP implementation. Joe, Tyler, it’s great to have you both back on the podcast again, talking about how to create a successful foundation for an ERP adoption. So, I want to get into this topic, but before I do, I wanted to give you both a space to talk about yourselves and what you do for us here at Zone. 

Tyler

Hi everyone, my name is Tyler Santos. I’ve been with Zone for about four and a half years. I’m the VP of Engineering. My team is responsible for building customizations for our NetSuite implementations and ZoneBilling implementations to enhance the processes that clients have in their NetSuite environments. My team also works on the building of our SuiteApps. So, ZoneBilling, ZonePayments, ZoneCapture, ZoneApprovals, et cetera. So, thanks so much again for having me on the podcast. 

Joe

Hi everyone, I’m Joe Scavotto, I run the pre-sales solution consulting team here at Zone. I’ve been here for over three and a half years helping companies evaluate their systems and how our products that Tyler and his team are building can really help companies with their day to day. I’ve been using the NetSuite platform now for about seven years. I did spend a number of years as a solution consultant at NetSuite, and in a prior life I was actually an accountant by trade. Great to be here, everyone, and looking forward to it. 

Jake

Such a wealth of expertise here and really excited to have you both on the podcast again to talk about how to set up a good foundation for your ERP. We’ve had a couple different conversations on the podcast about data migration, and even us, we’ve talked before about automation in your finance system and your ERP, but a lot of it comes down to setting up a good foundation when you first set up your ERP. That’s what I want to get into, that’s what we’re going to talk about today. Before we talk about how to create a good foundation, why don’t we talk about what a good foundation looks like? So, Tyler, what are some of the tent poles of a good foundation for ERP adoption?

Tyler

If you’re looking to install a new ERP in your business, I think identifying the problems that you have in your current processes, or even the areas that are working really well, in order to create those buckets of capabilities that you need, and those will inherently tell you what you need the system to do. So whether that’s on the journal-entry side, the billing side, on the accounts payable side. Another key component that I think is important is to identify and work with the leadership team to understand what is the strategy of our business moving forward and what are the business capabilities that we’re really trying to achieve in the future, so that we can identify buckets and capabilities that might not even have or be aware of right now, but you might want to build for in the future. Whether you guys are looking to go public in the next five years or if that’s a possibility and you guys need really advanced revenue recognition capability in order to be ASC 606 compliant. All of those are points for you to outline and say hey, these are the buckets of capability and foundation that you’re going to need for a new ERP. 

Joe

I like to really approach it by taking a look at my current structure. I’m using a smaller ERP and I need to migrate upwards, or if I’m not even on an ERP. You know, what is my structure today? Your first thought shouldn’t be I want to recreate that structure. I don’t want to bring in a chart of account structure that maybe I’m not even using all of the charts of accounts. Or maybe it is set up in a way that’s not scalable. Maybe there’s ten thousand charts of accounts that you just created ad-hoc over the years, but you’re not really using them. So really taking that step back of understanding how do I want my ERP to be structurally sound from the beginning? But getting to that ability to have a nimble accounting system that’s able to grow with you there. So that kind of gives you the foundation of how and why to bring in data a certain way, but also taking a look at your processes. If it’s order-to-cash or lead-to-cash, what is that process today? Is it a streamlined process? Because if it’s not, why are we trying to recreate that inside of a new ERP? This gives you an opportunity to create the most efficiencies that you can on day one, and not have to re-tailor or reconfigure something six or ten months down the road because you’re like hey, I wish I would’ve set it up this way. So really taking that time, understanding your business processes that you have. Think about ways that you can streamline the processes, giving you that strong foundation, but also being able to grow with that as well. 

Jake

Scalability, that’s what it’s all about. How can a company start to build towards this foundation and have a good foundation? I guess what I’m really asking here is: What are some things a company can start doing now—start organizing their data now or start organizing their workflow—to prepare them for when they do eventually get into their ERP? What are some key things that they really need to look at doing to make sure they have a good foundation to start with?

Tyler

So what I think is really important, when you are trying to work to build this new foundation, is that you need to identify the processes that you have pain points in, and you want to focus on not recreating those problems. And the key there is to take advantage of the opportunity to reinvent those things to solve all the problems as you’re working. Another key recommendation that I have for a lot of individuals who are introducing a new ERP is don’t try to boil the ocean, either. Try to make sure that you are making progress towards your goals and your processes as you implement them because it can be a very daunting task. But you want to make sure you get a functional baseline of all the capabilities you have and then you can add to it over time. Whether it’s customizing the system further or bringing in some add-ons to that ERP in order to enhance your business processes. When you’re at the beginning of implementing that ERP, as long as you’re aware that those capabilities are possible, then you can continue down the road. 

Joe

I really like to talk to clients about the phasing approach. Not boiling the ocean. What do we need day one to stand up to get you off of your old system? But knowing that’s not the end goal. We know we want to get you to a future proof, automation on every level. But know that by getting you out of your old system today, your employees get comfortable in the new system. They get to use it faster by going through a phased approach as opposed to turning everything. It really extends the life of a project. Now you get people in the system faster and you can come up with hey, we can actually reorganize our order-to-cash process by leveraging the system. We can use the system and its abilities for approval routing, for example. Getting vendor bills in in an automated fashion. Because we’re leveraging the system. But to do all that on day one really draws out the process because the hindering part is you don’t know what the final outcome of your order-to-cash process is because you’re using a legacy system. Or maybe you’re not using systems at all. So now you have that option. Go live and really build from there. 

Jake

That’s great. And I love how you guys are both bringing up this point of focusing on your pain points, focus on the one thing, do this in phases. So I’m curious to hear what you’ll say about this, guys. What should a company start with? If you had to pick one thing, and I’m sure this will be different from company to company? What are some common things that are good first steps for building that foundation for your ERP adoption?

Tyler

The key thing for an ERP adoption is going to be your users. And those are going to be your business users throughout your company that really need to enjoy using the system and these new processes that are inherently going to create some friction initially. They’re going to be used to the old way things were done, they are not going to be used to this new system, they’re going to feel like they have to learn something new. So one of the key things that we like to identify is, using change management as your process for how to tackle this. Just start with a small subset of your employee population to introduce new features that are needed in your finance processes and then grow from there. So what we commonly see is usually businesses will get their ERP up and running and they will initially just use it for general entries and to create their financial statements. So start there. And then work to start adding on more modules, whether it’s their order flow, whether it is adding in their payments to vendors and their bills. So that way, you can start to add more capabilities onto the system and enable them to a larger group of people, where you already have individuals that have been onboarded prior that are kind of champions of the system, that can coach other people, so that there is an organic growth to the system within the company from a people perspective. Because at the end of the day, if the people don’t like the system and they don’t like the processes that the system is enforcing, you’re going to have friction. The system is not going to be as successful as it could have potentially been.  

‍Jake

Great advice there. And such a great first step. Get your people in, do that even in phases. That’s such an important piece, I like that. Thank you, Tyler. Joe, what’ve you got? Any other advice there?

‍Joe

One thing that comes to mind is, as Tyler was explaining, getting the financials, the core components of it. Then, as a second step to that, maybe not go and say hey I want to go implement order-to-cash across all of my divisions, all of my subsidiaries, and really take one, get that one up and running. Now, it’s taken that user adoption that you just had and now you’re getting people more comfortable with the system. I like to really focus on: let’s get one of these business units live, have them uncover those kinks in your process that you can actually refine so when you have your large, most complex one, you have a great foundation to say oh, that’s easy, we can just implement this and we’re good to go. It just gives you that pathway to be able to get the business up and running. 

Jake

Great advice all around, thank you both for sharing. As we wrap up, is there any parting advice that you’d give to someone who’s beginning their ERP system, they’re right on the edge, they’re wanting to make sure they have a good foundation? Any parting advice? 

Tyler

My key advice, I would say, is take it in waves and take it slow. It’s definitely a daunting task. From my experience working with different clients and from my experience in the past doing net new ERP installs at prior companies, it can just seem like such a large body of work. Take your time, do your due diligence, do not rush the process—because focusing on getting it right and being really aware of how your company needs these business processes to work within a system is going to enable everybody within the company to be on board and the success of the entire implementation to go really well.

Joe

Taking the time is so important. Do not rush this, do not try to force the system to go live tomorrow when you need an extra week. Give yourself the pathway for the end goal, which is to have the most automated, structurally sound ERP that gives you the ability to grow. And that really starts with taking the time, taking it step by step. Don’t rush the process. And being able to really uncover: how do I do things today, and how do I want to do things tomorrow? How do I want to give my users the most information that they need at their fingertips to run their day-to-day operation?

Jake

Tyler, Joe, thanks so much for sharing your expertise on this topic. Love the conversation of start slow, take it step by step, do things in phases. This whole mindset of progress over perfection, I really like that and I think this is a great step. Hopefully our listeners have gotten some really important first steps of how they can start to set up their foundation for a good, successful ERP adoption. Thank you again both for sharing today.

‍Tyler

Thanks for having us, Jake.

Joe

Thanks so much.