Megaventory Blog - Online Inventory Management Software, Order fulfillment and Control System
This is the company blog for megaventory, an online software that helps small businesses that buy, sell and manufacture physical products to manage sales, purchasing, manufacturing and inventory. We blog about new features and updates but also about enterprise software, small businesses, cloud computing and the industry in general.

Friday, June 22, 2012

Choosing an ERP consultant: Pemeco Consulting

This post is the first of a series of posts aimed primarily in helping small businesses understand how to better pick a consulting company for their ERP, Inventory Management, Order management or Sales software implementation. We’ll be doing this by discussing with a different consultant or consulting company in each post.

First up is Pemeco Consulting, via the words of Jonathan Gross, Vice President and Corporate Counsel.
 

Tell us a few words about you or your company and your personal role in it. 

Our firm, Pemeco Consulting, has been in business since 1978. Over this period, we have transformed from an IT service bureau into a pure IT consulting/advisory firm. Though the service bureau and consulting business models are very different, our evolution happened quite naturally. In the 1980s, manufacturing and distribution organizations came to us looking for help selecting and implement sophisticated software for material requirements planning (MRP) and production scheduling functions. In the 1990s, software vendors began to extend MRP software functionality to other business functions. And, we correspondingly expanded our range of services. We’ve been in the ERP consulting space long before it was called ERP.

Personally, I joined the firm in 2009. I’m lawyer, an MBA, and a part-time MBA professor of Systems Analysis and Design at the Schulich School of Business at York University (ranked #9 worldwide by the Economist Magazine). I advise clients on IT/ERP strategic planning and project manage their selection projects. 

Do you have expertise in a particular brand of ERP software or are you totally brand-agnostic when it comes to your consulting? Why did you make such a choice? 

Pemeco Consulting is 100% vendor-agnostic. As an advisory firm, we’re in the business of filling our clients’ expertise gaps in the areas of IT strategy, ERP selection, ERP implementation, and post-implementation optimization. Our clients need to trust that the recommendations we make as trusted advisors are in their best interests. The only way we can maintain this trust is if we shun benefits offered by software vendors and resellers. In other words, our business model is built around the principle that our advice and services are un-conflicted.

Do you specialise in a particular part of the total spectrum of ERP functionality (CRM, inventory, manufacturing, distribution, financial, project management etc.) or do you offer a broader service? 

As a firm, we specialize in the project management of all things ERP – including strategy, selection, implementation, and post-implementation optimization. Our objectives are threefold, to deliver projects: 1) on-time, 2) on-budget, and 3) according to defined performance expectations. To do so, we generally build teams that include personnel from our firm, the vendor, and the client. 

Do you have certain tools and/or approaches you use when working with your clients? 

We rely on proprietary project management methodologies that we’ve designed specifically for complex ERP-related projects. For example, our ERP implementation methodology – Milestone Deliverables: The Hands-On Approach to Implementing ERP Projects - is published, and our book sells in more than 40 countries. The underlying premise is that teams are more effective if they work towards small, tangible, and achievable targets.

Our clients trust us to bridge the gap between its business needs and an ERP-optimized future state. To successfully bridge that gap, the client has to buy-in to the proposed changes. However, it should never do so blindly. Therefore, it’s critically important that the client’s people be appropriately involved in the projects – both to make effective decisions and to undertake project-related work.

One of the ways we do this is by setting up an appropriate organizational structure and communications mechanism. For example, we establish an executive-level steering committee that we report to periodically about project status – such as budget, schedule, and progress. We also establish a core team comprised of departmental leaders. This team is generally responsible for assisting in day-to-day project execution. In the case of an ERP selection project, for example, the core team would participate in software demonstrations. Under the leadership of the project manager, the members would be responsible for evaluating the extent to which a proposed software solution is capable of handling the company’s business processes. In the case of an implementation project, a core team would be responsible for mapping the business processes, testing the software, and training the end-users, among other things (again, under the leadership of the project manager). 

Do you focus on particular industries? 

Over the past 15 years, we have largely served businesses in a broad array of manufacturing and distribution sectors. On the discrete manufacturing side, we serve hi-tech/electronics, aerospace, automotive suppliers, home furnishings, industrial equipment, durable goods, among others. On the process side, we largely serve paints, chemical, plastics, and pulp and paper companies. 

In what ways is your role changing due to the broader cloud adoption for business uses and the abundance of online ERP vendors? 

The emergence of SaaS and cloud ERP software as mainstream doesn’t change our services delivery model. We have to stay informed about the technologies, risks, and business case implications of the various forms of software. Moreover, our advisory methodologies don’t change either. On an implementation, for example, businesses have to focus on organizational change management, data migration, and system testing regardless of the platform. 

What is the role of the ERP consultant when it comes to helping a small business which is on the market for an ERP solution? 

Small businesses – like any sized business – have typically embedded sub-optimal processes into their operations. As these businesses grow, the detrimental effects of the sub-optimal processes become manifest. Common warning signs include: increasing delivery delays, increasingly undetected product defects, and increasing turnover of long-standing customers. An ERP consultant who is assisting with software selection should, first and foremost, be able to advise a small business on how it can improve its business processes using ERP software. This typically involves defining core non-negotiable processes as well as proposed business process enhancements. This is what we mean when we say “define your requirements”. Once the requirements are well defined, a consultant should be able to manage a due diligence project aimed at finding a software that fits those requirements.

If there is one key takeaway for a small business, it is this: choose a consultant that focuses on defining your business’ unique requirements and matching a system to those requirements. Avoid using canned templates and specifications lists. These templates weren’t built for your business and, consequently, the results they yield might not match your business’ requirements.

What do you think are the major problems/challenges in the ERP consulting industry? 

The price of ERP is dropping, and the array of alternatives available to small business is widening. In some respects, the availability of choice is a good thing for small business. In other respects, it complicates the selection process.

The ERP consulting space generally struggles to effectively service the small business community. There is clearly a need, particularly given the high failure rates associated with ERP selection and implementation projects. Though ERP software is becoming commoditized, the supporting business services are not. Selecting ERP, implementing ERP, and optimizing business processes are still high-value services. The challenge is convincing a small business of this value before it makes a mistake.

How do you see the business software evolve? What should a small business keep in mind and expect in the next 12 months? 

Enterprise software and peripheral technologies are rapidly evolving. Innovations in the areas of cloud, mobile, analytics, human capital management, and sustainability are providing opportunities reflect evolving business needs. To build a better business, it’s important to understand the scope of these technologies, and whether there is a supporting business case given their particular circumstances and needs.