White Paper

Achieving A Faster ROI On Business System Implementation

Source: Made2Manage Systems, Inc.
Time is money. Nowhere is that adage demonstrated better than in the purchase and implementation of enterprise manufacturing software. For most companies - whether multi-billion dollar global operations or small to mid-sized companies located down the street - installing enterprise-wide software signals a time of transition.

Companies investing in business and manufacturing software often re-evaluate their current operating and training processes concurrently with implementation, in hopes of quickly achieving the added efficiency that translates into an increased bottom line. At the same time, most companies realize they will have to put up with some pain to gain the enhanced revenues and earnings possible with new software and new systems.

Small and mid-sized manufacturers are different from their global, billion-dollar cousins. And the differences are more than size and resources. They extend into philosophy and attitudes. Not only do small and mid-sized companies lack the budgets, but also they often have more generalists than specialists. They may have an IS person instead of a staff. Because they operate with fewer resources, they need to see a return on investment faster than their larger counterparts, and they need to avoid gambling on technologies and vendors without staying power.

For small and mid-sized manufacturers, Made2Manage Systems, Inc., offers business system software that dramatically reduces the time needed to see a return on the investment and the inconvenience and the insecurity caused by the implementation process. Made2Manage defines small to mid-sized manufacturers as those companies or semi-autonomous divisions of larger corporations with 50 to 1000 employees.

Providing software solutions to this market since 1986, Made2Manage has learned about this market by listening to its customers. Customers express concerns, such as "How long will this process take?" "What will this system require in the way of resources?" "How will implementation affect our business?" "Will the people really use it?" "Will there be support to help our folks use it even after implementation?" What they really want to know is how long it will be before they will see the gain for the pain.

Understanding the questions that come to mind, and knowing that implementing enterprise-wide software can strain existing resources at small and mid-sized companies, Made2Manage has developed a suite of tools to facilitate the process.

Although manufacturing companies differ when it comes to operational styles and processes, depending on whether they are a make-to-order foundry, an injection blow-molding operation or produce other products, a Deloitte and Touche study found that all manufacturers go through similar phases while implementing a new business system, or any large change for that matter. These phases (described below) are implementation, disruption, stabilization and value. Depending on the business software being used, companies can spend more or less time in each phase.

Implementation Phase: Time spent on learning the software and preparing for when the software actually helps run the business. For some business software providers, this time can range up to 18 months. Made2Manage estimates this time with its products to be less than six months on average.

Disruption Phase: This time frame covers the phase from when the company "goes live" by beginning use of the software until the time all users become comfortable with it. It covers the time when employees discover the kinks in the new system. Productivity may decline, increase, then decline again as workers adapt to change and new procedures. Understanding that a new system may cause disruption in the workflow is a necessary step in preparing for implementation.

Stabilization Phase: Time after the company has worked out the issues regarding the system, and use of the system has become business as usual. At this point the business system has become part of the company's normal operating routine. With acceptance of the new procedures, performance levels off and stabilizes.

Value Phase: Desired state during which the company realizes full value of the system with a return on their investment, expanded bottom line, and continuous service and production improvements. The measurable statistics have improved, indicating increased on-time deliveries, reduced work in progress, better efficiencies and enhanced customer satisfaction, all pointing to a growth in profitability.

All manufacturers want to reap the benefits from their business/manufacturing software as soon as possible. However, Ray Vallillo, an implementation consultant with more than 15 years experience in helping companies adopt business systems, points out that there is always a learning curve. "It's just like taking an Indy car driver and putting him into a NASCAR race. He may be the best Indy car driver and have the fastest car made, but there are differences between the two and it will take him time to adapt to the new style of racing."

Implementation Versus Value
Many print and copy shops have a sign reading "Price, Quality, Speed: Pick Any Two." For enterprise software, a similar sign would read "Speedy implementation or Value, Pick One." Although speedy implementation would seem, on the surface, to be an admirable goal, racing through the early steps can mean reaching a longer and deeper disruption phase sooner.

To ensure a system can bring a company to the value phase as quickly as possible, it is important that the software manufacturer offer a clearly defined implementation plan that includes the required steps and rationale for the process. Lack of a concrete plan - or skipping steps for speed - will only extend the time until a company reaches the value phase. In some cases, a quick implementation without the right tools can frustrate employees, causing disruptions to employee morale and, in turn, to customer service.