1 00:00:00,000 --> 00:00:08,280 Welcome to the Growing EBITDA podcast, where we unlock the doors to management and technology 2 00:00:08,280 --> 00:00:10,680 insights in the middle market. 3 00:00:10,680 --> 00:00:15,640 Join us as we explore innovative strategies to drive revenue and EBITDA growth, interviewing 4 00:00:15,640 --> 00:00:18,240 industry leaders and technology experts. 5 00:00:18,240 --> 00:00:23,400 Whether you're looking to streamline operations, understand the latest tech trends, or lead 6 00:00:23,400 --> 00:00:27,320 your company towards exponential growth, you're in the right place. 7 00:00:27,320 --> 00:00:32,200 Stay tuned and let's grow together. 8 00:00:32,200 --> 00:00:38,840 So James, to get started today, is it ERP or is it ERP? 9 00:00:38,840 --> 00:00:43,600 It is ERP and it stands for Enterprise Resource Planner. 10 00:00:43,600 --> 00:00:44,600 Got it. 11 00:00:44,600 --> 00:00:45,600 I'm glad we clarified that. 12 00:00:45,600 --> 00:00:46,600 Yeah. 13 00:00:46,600 --> 00:00:51,000 I just want to make sure everybody continues to understand just how good a technology I 14 00:00:51,000 --> 00:00:52,000 am, right? 15 00:00:52,000 --> 00:00:57,000 And that I just want to reiterate how I'm not the technology expert here on the show. 16 00:00:57,000 --> 00:01:00,440 Establish a nice baseline and throughout the season of listening to podcasts, we're just 17 00:01:00,440 --> 00:01:02,160 going to see your skills and talents grow. 18 00:01:02,160 --> 00:01:03,160 That's right. 19 00:01:03,160 --> 00:01:04,160 That's right. 20 00:01:04,160 --> 00:01:05,160 Thank you. 21 00:01:05,160 --> 00:01:06,160 Thank you. 22 00:01:06,160 --> 00:01:08,760 So James, today we're talking about ERP systems. 23 00:01:08,760 --> 00:01:14,820 And to get us started, I think all of our listeners probably have an ERP system in place 24 00:01:14,820 --> 00:01:16,520 in their business of some sort. 25 00:01:16,520 --> 00:01:21,320 I'm sure we'll have a couple of listeners maybe still running their businesses on QuickBooks. 26 00:01:21,320 --> 00:01:22,880 We certainly see that from time to time. 27 00:01:22,880 --> 00:01:25,720 You can run a pretty big business on QuickBooks. 28 00:01:25,720 --> 00:01:29,040 It's a function of whether you can do that efficiently or not as the business scales. 29 00:01:29,040 --> 00:01:34,840 But a wide variety of ERP systems out there, we've kind of seen them all. 30 00:01:34,840 --> 00:01:38,480 Probably one of the most common questions that we get when we're chatting with clients 31 00:01:38,480 --> 00:01:42,560 is, is it time to upgrade my ERP system? 32 00:01:42,560 --> 00:01:50,740 So how do you coach businesses when they're business leaders rather, when they're thinking 33 00:01:50,740 --> 00:01:56,680 about an ERP system change, how do you identify when it's the right time to do an upgrade? 34 00:01:56,680 --> 00:02:00,720 Or how do you decide whether or not you're going to continue to reinvest in the current 35 00:02:00,720 --> 00:02:01,720 system? 36 00:02:01,720 --> 00:02:05,440 When we start these conversations, I like where you began by saying when you're speaking 37 00:02:05,440 --> 00:02:09,440 to the business, because they need to be business led conversations. 38 00:02:09,440 --> 00:02:14,280 And that ERP needs to be driving business value and helping the business run successfully. 39 00:02:14,280 --> 00:02:19,960 So I think when we talk about ERPs, there's a few different reasons that folks upgrade. 40 00:02:19,960 --> 00:02:25,680 And one of them is around the operational bottlenecks and the challenges that systems 41 00:02:25,680 --> 00:02:30,320 present when they're not adequate for the scale of the business or the needs of the 42 00:02:30,320 --> 00:02:31,320 business. 43 00:02:31,320 --> 00:02:34,880 And essentially the ERP becomes outdated. 44 00:02:34,880 --> 00:02:36,000 There's a few reasons that happens. 45 00:02:36,000 --> 00:02:38,160 You mentioned QuickBooks, which we do see a lot. 46 00:02:38,160 --> 00:02:41,340 As my business starts to scale, everything else starts to scale. 47 00:02:41,340 --> 00:02:45,880 If you think about it, as I scale my business, I buy more things, be able to do more. 48 00:02:45,880 --> 00:02:48,420 I need to add more humans, be able to do more. 49 00:02:48,420 --> 00:02:52,400 But sometimes we forget about those systems and hope or expect those systems spill the 50 00:02:52,400 --> 00:02:53,400 keep up with us. 51 00:02:53,400 --> 00:02:58,460 So those bottlenecks can be presented when the system isn't sufficient for the business. 52 00:02:58,460 --> 00:03:06,200 The second that we see is we know that new ways of working, new technology to use, new 53 00:03:06,200 --> 00:03:10,880 systems come along every day and making sure that we're still able to connect to those 54 00:03:10,880 --> 00:03:11,880 systems. 55 00:03:11,880 --> 00:03:17,720 You know, in our personal lives, we went from VHS to DVD to streaming. 56 00:03:17,720 --> 00:03:20,680 And we want to be able to get those great things about streaming and seeing any show 57 00:03:20,680 --> 00:03:22,100 at any time. 58 00:03:22,100 --> 00:03:27,880 There has to be upgrades made in your technology within your home to help them enjoy that technology. 59 00:03:27,880 --> 00:03:29,220 Same thing for the ERP. 60 00:03:29,220 --> 00:03:32,920 New connections are made, the ability to tie to your bank, the ability to tie to systems 61 00:03:32,920 --> 00:03:37,440 or automation within the warehouse requires a new core system there. 62 00:03:37,440 --> 00:03:42,980 And the last one is really under, it's about user inefficiencies. 63 00:03:42,980 --> 00:03:47,800 I have users that go into the system every day to accomplish work and complete tasks. 64 00:03:47,800 --> 00:03:51,560 And if they're not able to complete those tasks in an effective manner, whether that's 65 00:03:51,560 --> 00:03:56,140 the systems out there, the trainings out there, or it's too complicated, it can slow down 66 00:03:56,140 --> 00:03:57,140 my business. 67 00:03:57,140 --> 00:04:01,360 So it's a way to really help your users work quicker and more efficient in their day to 68 00:04:01,360 --> 00:04:02,760 day jobs. 69 00:04:02,760 --> 00:04:08,660 So how do you think though, you know, a lot of businesses start thinking about ERP upgrades 70 00:04:08,660 --> 00:04:15,160 and one of the biggest hesitations is usually cost driven, right? 71 00:04:15,160 --> 00:04:22,000 We've all heard horror stories from multi-year ERP system implementations, or maybe it was 72 00:04:22,000 --> 00:04:25,160 supposed to take 12 months or 24 months. 73 00:04:25,160 --> 00:04:32,300 We've heard of businesses on year five or seven, in some cases more of their ERP conversions, 74 00:04:32,300 --> 00:04:33,300 so to speak. 75 00:04:33,300 --> 00:04:36,840 I mean, it sounds like a very expensive thing to do. 76 00:04:36,840 --> 00:04:43,200 How do you balance, you know, looking at costs versus efficiency pickups? 77 00:04:43,200 --> 00:04:45,440 How do you think about that? 78 00:04:45,440 --> 00:04:49,840 So the first thing we tell everyone is start with a charter and have an agreed upon plan 79 00:04:49,840 --> 00:04:51,740 before you do anything. 80 00:04:51,740 --> 00:04:55,600 The whole knowing where the end of the marathon is, so you know you finished the race, pretty 81 00:04:55,600 --> 00:04:56,960 quintessential. 82 00:04:56,960 --> 00:05:02,640 We see time and time again that folks begin their ERP journey with a loose plan of what 83 00:05:02,640 --> 00:05:06,840 they want to do or saying something like, let's just get what we have today in a better 84 00:05:06,840 --> 00:05:07,840 system. 85 00:05:07,840 --> 00:05:13,960 Unfortunately, that lack of rigor creates a gap that's then filled in by some unfortunate 86 00:05:13,960 --> 00:05:18,320 designs by technologists or unfortunate decisions by the business. 87 00:05:18,320 --> 00:05:23,360 So we like to say all the time, prepay the pain, put together a plan, have an agreement, 88 00:05:23,360 --> 00:05:26,520 understand where you're going, set a budget to it. 89 00:05:26,520 --> 00:05:32,080 The next part of that is having the conversations and picking somebody from your team that's 90 00:05:32,080 --> 00:05:36,360 ultimately accountable and responsible that's focused on the success of the ERP. 91 00:05:36,360 --> 00:05:40,820 When nine people own the success, zero people really own the success. 92 00:05:40,820 --> 00:05:45,200 Having a focused resource with that budget they're aligned to and a trusted partner, 93 00:05:45,200 --> 00:05:47,440 we see folks be successful all the time. 94 00:05:47,440 --> 00:05:50,140 And here's an easy question for you. 95 00:05:50,140 --> 00:05:54,480 How much does it cost to upgrade an ERP system? 96 00:05:54,480 --> 00:05:55,480 Yes. 97 00:05:55,480 --> 00:05:56,480 So it's amazing. 98 00:05:56,480 --> 00:05:58,440 It's a dollar 99. 99 00:05:58,440 --> 00:06:01,920 The challenge is it's expensive and you don't know how expensive it is depending on your 100 00:06:01,920 --> 00:06:04,000 business and what you're trying to do. 101 00:06:04,000 --> 00:06:05,000 It's a big delta. 102 00:06:05,000 --> 00:06:12,360 You can have folks that have ERPs that cost $100,000 to implement, and then you have folks 103 00:06:12,360 --> 00:06:15,160 who cost $100 million to implement. 104 00:06:15,160 --> 00:06:19,240 In our space and the space that we work in every day, we typically see folks anywhere 105 00:06:19,240 --> 00:06:25,800 from $200 to $1 million during their ERP implantation, depending on scale, size, and complexity. 106 00:06:25,800 --> 00:06:27,240 So let's move off cost. 107 00:06:27,240 --> 00:06:31,280 I think we could probably spend a lot of time talking about costs of different systems. 108 00:06:31,280 --> 00:06:35,960 I'm sure you've got a bunch of horror stories and maybe a couple of, it was a little easier 109 00:06:35,960 --> 00:06:41,640 than we thought stories that maybe we'll save for a different episode. 110 00:06:41,640 --> 00:06:46,040 But let's talk about, let's dig a little bit more deeper into the benefits. 111 00:06:46,040 --> 00:06:50,240 So let's make the assumption that somebody has decided they've outgrown their current 112 00:06:50,240 --> 00:06:51,240 system. 113 00:06:51,240 --> 00:06:53,040 They definitely need to upgrade to a new one. 114 00:06:53,040 --> 00:06:59,860 What kind of benefits do you see people in 2024, for example, experiencing when they're 115 00:06:59,860 --> 00:07:03,720 upgrading to some of the latest and greatest systems that are out there? 116 00:07:03,720 --> 00:07:10,760 When folks today work in an ERP that's underperformant or could be improved, we see that they have 117 00:07:10,760 --> 00:07:14,560 to go to multiple systems to accomplish their job and get it done. 118 00:07:14,560 --> 00:07:17,020 The most common that we all know is Excel. 119 00:07:17,020 --> 00:07:21,840 So I do some stuff on paper, I go into the system, I do some stuff, and then at the end 120 00:07:21,840 --> 00:07:25,240 of the month, maybe I do some other things in Excel to be able to get it done. 121 00:07:25,240 --> 00:07:29,560 So having that integrated system where everything's together, everything's aligned, and everyone's 122 00:07:29,560 --> 00:07:33,200 working towards the same thing, big benefit. 123 00:07:33,200 --> 00:07:39,120 Number two, if we remember on the green sheets of paper that used to print and the dot matrix 124 00:07:39,120 --> 00:07:42,080 printers and at the end of the week, you would get your sales report and they'd rip it off 125 00:07:42,080 --> 00:07:43,360 the printer and they'd run it down. 126 00:07:43,360 --> 00:07:46,960 Everyone knew, hey, here's how I did this week. 127 00:07:46,960 --> 00:07:50,720 We're pretty far from that generally, but we're not far from that in some systems. 128 00:07:50,720 --> 00:07:55,800 That delay could be 24, 72, or we see people with 15 day, 20 day closes. 129 00:07:55,800 --> 00:07:59,680 The ability to get that data in and be able to make decisions that can affect your business 130 00:07:59,680 --> 00:08:03,720 or help your business in a timely fashion is affected by not being able to have access 131 00:08:03,720 --> 00:08:05,440 to real time data. 132 00:08:05,440 --> 00:08:07,240 The last one is scalability. 133 00:08:07,240 --> 00:08:12,080 In this space we work in, we see businesses every day start double digit, single digit 134 00:08:12,080 --> 00:08:14,680 million and grow to triple digit million. 135 00:08:14,680 --> 00:08:17,360 Is that system able to scale with you? 136 00:08:17,360 --> 00:08:21,600 That's a huge benefit because if I'm not re-implementing the system every time I buy a new company, 137 00:08:21,600 --> 00:08:26,080 I'm really in a position of power to go to move quickly, absorb them, derive that business 138 00:08:26,080 --> 00:08:31,360 value, have a continuity between my processes and the way I work, really driving a lot of 139 00:08:31,360 --> 00:08:32,760 benefits. 140 00:08:32,760 --> 00:08:39,600 What factors should companies consider when selecting an ERP system? 141 00:08:39,600 --> 00:08:43,280 I think we all have a tendency to go for the banner name. 142 00:08:43,280 --> 00:08:46,280 When you think the Costco method, the Costco method is better best. 143 00:08:46,280 --> 00:08:49,080 When you go to Costco, there's no good. 144 00:08:49,080 --> 00:08:55,120 I think that idea that is this ERP the right ERP and can I use a different ERP? 145 00:08:55,120 --> 00:08:59,020 There's a tendency to go after the banner names and we all walk through airports. 146 00:08:59,020 --> 00:09:00,440 We see names in airports. 147 00:09:00,440 --> 00:09:02,240 We see ERPs all around us. 148 00:09:02,240 --> 00:09:04,000 Friends tell us about it. 149 00:09:04,000 --> 00:09:10,640 The unique thing about ERPs today is there's a lot of purpose built ERPs in the world today 150 00:09:10,640 --> 00:09:11,920 that are right for you. 151 00:09:11,920 --> 00:09:16,840 So selecting a purpose built ERP, for example, family of five, probably not going to buy 152 00:09:16,840 --> 00:09:18,000 a two door sedan. 153 00:09:18,000 --> 00:09:20,520 How do I find that vehicle that's appropriate? 154 00:09:20,520 --> 00:09:24,760 The other one that you should consider is the vendor. 155 00:09:24,760 --> 00:09:28,880 So if I go and get this really niche ERP that I just mentioned, but there's four people 156 00:09:28,880 --> 00:09:31,880 in the world that use it and there's nobody that can implement it and there's nobody that 157 00:09:31,880 --> 00:09:35,640 can support it, I'm going to end up spending exponentially more to be able to make that 158 00:09:35,640 --> 00:09:41,520 ERP successful than I would have chosen, than I would have choosing a better ERP. 159 00:09:41,520 --> 00:09:46,280 So how do I strike that balance of an ERP that's built for me and that has the support 160 00:09:46,280 --> 00:09:48,720 structure around it that can help people be successful? 161 00:09:48,720 --> 00:09:52,160 So James, how do you pick the right system? 162 00:09:52,160 --> 00:09:57,040 Yeah, I think businesses, it's a challenge because unless you have that broad view to 163 00:09:57,040 --> 00:09:59,680 be able to do that, it becomes a bit of a challenge. 164 00:09:59,680 --> 00:10:02,440 I'll tell you how we at Trivista have approached it. 165 00:10:02,440 --> 00:10:07,080 We've built a template that allows us to ask questions to understand your business for 166 00:10:07,080 --> 00:10:08,520 your business needs. 167 00:10:08,520 --> 00:10:14,320 And then we have a proprietary template because we don't resell software, our ERPs at Trivista. 168 00:10:14,320 --> 00:10:17,240 So we were able to partner with these folks, ask questions. 169 00:10:17,240 --> 00:10:21,400 And so we created an Excel sheet that gives us all the features and functions of common 170 00:10:21,400 --> 00:10:24,920 ERPs and we map those to what you need and we help you down select. 171 00:10:24,920 --> 00:10:29,300 Now that's nice to say for me, because we do about 150 transactions a year, so I have 172 00:10:29,300 --> 00:10:31,320 very rich data to go to. 173 00:10:31,320 --> 00:10:35,360 As a business owner, if you're not going to engage someone like a Trivista, I would encourage 174 00:10:35,360 --> 00:10:39,660 you attend the conference and don't attend the conference to speak to the technical folks 175 00:10:39,660 --> 00:10:41,000 or the salespeople. 176 00:10:41,000 --> 00:10:44,840 Talk to the other folks that are at the conference, ask what kind of business they run, ask what 177 00:10:44,840 --> 00:10:49,440 they're doing, get out and get involved, make some trips, go see folks. 178 00:10:49,440 --> 00:10:52,280 Don't just read websites. 179 00:10:52,280 --> 00:11:00,880 So James, expensive, you threw around hundreds of thousands to maybe a couple million dollars. 180 00:11:00,880 --> 00:11:01,880 Estimated financial benefits. 181 00:11:01,880 --> 00:11:06,200 What are you typically seeing when you're helping clients go through an ERP system upgrade? 182 00:11:06,200 --> 00:11:09,020 Yeah, Mike, this is a struggle, honestly. 183 00:11:09,020 --> 00:11:15,240 We struggle and the industry struggles on really putting in numeric value to implementing 184 00:11:15,240 --> 00:11:16,740 an ERP. 185 00:11:16,740 --> 00:11:22,720 So when you think about CapEx spend, when you work on a CapEx request, you really focus 186 00:11:22,720 --> 00:11:24,560 on what that value back is. 187 00:11:24,560 --> 00:11:26,000 So I need a new piece of equipment. 188 00:11:26,000 --> 00:11:31,820 I'm able to do XYZ and thus the dollars are, I guess, A in this example. 189 00:11:31,820 --> 00:11:35,980 So the challenge we have is that financial benefit changes for everyone. 190 00:11:35,980 --> 00:11:40,840 So if I'm a business services organization, getting my field reps better aligned, working 191 00:11:40,840 --> 00:11:45,440 quick, more quickly and being able to get out there in the field and be more efficient, 192 00:11:45,440 --> 00:11:48,200 I'm driving down those turns per day. 193 00:11:48,200 --> 00:11:49,200 I'm sorry. 194 00:11:49,200 --> 00:11:51,240 I'm driving down the labor for those turns per day. 195 00:11:51,240 --> 00:11:55,240 I'm increasing my revenue just based on my same staff. 196 00:11:55,240 --> 00:11:57,160 So that's one example of how that is. 197 00:11:57,160 --> 00:12:00,340 Then the other side of benefits is for a manufacturing organization. 198 00:12:00,340 --> 00:12:04,560 The ability to procure in a thoughtful manner, the ability to think about seasonality, the 199 00:12:04,560 --> 00:12:08,400 ability to have access to that real time data we mentioned earlier really affects and helps 200 00:12:08,400 --> 00:12:09,560 the business. 201 00:12:09,560 --> 00:12:13,560 What that looks like is some variable based on what they're doing, but we always really 202 00:12:13,560 --> 00:12:18,180 partner with our clients to understand how we can show that value, whether it's reduction 203 00:12:18,180 --> 00:12:22,560 of cost by human time or reduction of cost on materials. 204 00:12:22,560 --> 00:12:25,000 And so that's kind of a conversation every time. 205 00:12:25,000 --> 00:12:29,540 And we partner with a lot of CFOs every year to work on those calculations to really drive 206 00:12:29,540 --> 00:12:31,600 to something that's measurable by the organization. 207 00:12:31,600 --> 00:12:34,340 And it's not just some funny numbers we made up. 208 00:12:34,340 --> 00:12:43,720 So tell me about some of the common challenges people face when selecting and maybe implementing 209 00:12:43,720 --> 00:12:48,000 for the first time or changing out one ERP system for another. 210 00:12:48,000 --> 00:12:49,000 Talk to me about that for a few minutes. 211 00:12:49,000 --> 00:12:54,440 Let me tell you about maybe not directly with ERP, but one of the major challenges we see 212 00:12:54,440 --> 00:12:59,680 is I go to an individual and says, tell me how your business runs today. 213 00:12:59,680 --> 00:13:02,920 Map out every single process you do. 214 00:13:02,920 --> 00:13:04,780 That's tough for an organization. 215 00:13:04,780 --> 00:13:09,520 There's a lot of pockets of knowledge within an organization and companies grow over time, 216 00:13:09,520 --> 00:13:11,140 become more complex over time. 217 00:13:11,140 --> 00:13:17,480 And so you organically grow into this complex, tightly woven bunch of different processes 218 00:13:17,480 --> 00:13:20,160 and we have to tease those out to be able to do the ERP. 219 00:13:20,160 --> 00:13:24,280 So the first challenge is who are you, what do you do? 220 00:13:24,280 --> 00:13:30,920 Second challenge is really aligning the team to be able to have resources to get it done. 221 00:13:30,920 --> 00:13:35,520 Very rarely do I go into an organization and they say, hey, my folks have really nothing 222 00:13:35,520 --> 00:13:36,520 to do. 223 00:13:36,520 --> 00:13:38,680 They've got plenty of time to focus on the ERP. 224 00:13:38,680 --> 00:13:41,640 It's I have a job I run day to day. 225 00:13:41,640 --> 00:13:46,560 I have a day to day responsibility and I need to be able to continue to focus on that responsibility 226 00:13:46,560 --> 00:13:48,380 and work on the ERP. 227 00:13:48,380 --> 00:13:51,840 So it's tough to be able to have those resources aligned. 228 00:13:51,840 --> 00:13:56,480 And then the last one that I think is really a challenge is during the implementation, how 229 00:13:56,480 --> 00:13:59,000 do I know it's going well? 230 00:13:59,000 --> 00:14:02,920 How do I know I'm on track and how do I know I'm delivering a product that works for me? 231 00:14:02,920 --> 00:14:07,000 If you have a good partner or an outside group that's guiding you, you can leverage their 232 00:14:07,000 --> 00:14:08,000 tools. 233 00:14:08,000 --> 00:14:12,680 But if you've never experienced the CRP, used the CRP or done something at this scale, how 234 00:14:12,680 --> 00:14:15,680 does your team know what's the measure of success? 235 00:14:15,680 --> 00:14:19,720 And so those can be some challenges along the journey that create some tension, implementing 236 00:14:19,720 --> 00:14:24,680 the wrong thing, falling behind, budget going over, employees threatening to leave, poor 237 00:14:24,680 --> 00:14:25,680 training. 238 00:14:25,680 --> 00:14:31,120 And those are victims of kind of these buckets of challenges that can be easily solved with 239 00:14:31,120 --> 00:14:34,120 the right preparation and partners. 240 00:14:34,120 --> 00:14:40,920 What's the single most common failure in ERP implementations? 241 00:14:40,920 --> 00:14:45,800 Well, can I say it's a tie between two things? 242 00:14:45,800 --> 00:14:47,020 Go for it. 243 00:14:47,020 --> 00:14:52,080 Number one, trying to replicate the system you had before in the new system. 244 00:14:52,080 --> 00:14:54,200 Failure number one. 245 00:14:54,200 --> 00:15:00,760 Failure number two is poor planning and documentation of the desired deliverables. 246 00:15:00,760 --> 00:15:03,000 And sometimes those go hand in hand and it's a mix. 247 00:15:03,000 --> 00:15:06,560 But really when we get called in and like the helicopter rescue situations, we get called 248 00:15:06,560 --> 00:15:08,280 all the time, hey, we're struggling with ERP. 249 00:15:08,280 --> 00:15:10,000 Can you come in and help us? 250 00:15:10,000 --> 00:15:13,260 When we land, those are the two major buckets we see. 251 00:15:13,260 --> 00:15:19,320 So tell me a little bit more about the first example, trying to recreate what you already 252 00:15:19,320 --> 00:15:20,320 have. 253 00:15:20,320 --> 00:15:26,240 I imagine a lot of people start off saying, this is the way we do it now. 254 00:15:26,240 --> 00:15:28,480 We need to be able to do it like this in the future. 255 00:15:28,480 --> 00:15:31,680 So what's the, and seems like a reasonable request. 256 00:15:31,680 --> 00:15:32,680 What's the rub? 257 00:15:32,680 --> 00:15:33,680 Yeah. 258 00:15:33,680 --> 00:15:35,560 I'm going to use an example from you, Mike. 259 00:15:35,560 --> 00:15:40,000 You and I were talking today and you gave an example of you retooling the way you ran. 260 00:15:40,000 --> 00:15:42,980 Do you want to talk about that for a second on your retooling of how you ran? 261 00:15:42,980 --> 00:15:46,320 You want to hear about how poor of a long distance runner I am? 262 00:15:46,320 --> 00:15:47,320 Sure. 263 00:15:47,320 --> 00:15:48,320 Let's get at it. 264 00:15:48,320 --> 00:15:56,120 Well, the example that I shared was one where I went to a physical therapist who helped 265 00:15:56,120 --> 00:16:01,640 me understand why my knees hurt so much when I ran and I was just running the wrong way. 266 00:16:01,640 --> 00:16:04,600 And as I'm saying this now, I'm realizing what you're probably going to tell me about 267 00:16:04,600 --> 00:16:11,360 ERP systems, but by changing some of the mechanics of my run, some slight adjustments that were 268 00:16:11,360 --> 00:16:19,160 easily compromised, I completely changed the outcome where my knees no longer hurt and 269 00:16:19,160 --> 00:16:20,600 distance was no longer an issue. 270 00:16:20,600 --> 00:16:22,280 There's a huge unlock, right? 271 00:16:22,280 --> 00:16:25,560 And those incremental changes, you probably could have run the other way forever at a 272 00:16:25,560 --> 00:16:27,720 lower scale, not at the same performance. 273 00:16:27,720 --> 00:16:29,480 And I think that really ties the ERP. 274 00:16:29,480 --> 00:16:32,600 It was a great example that we just so happened to be talking about today. 275 00:16:32,600 --> 00:16:34,760 It's those little incremental changes. 276 00:16:34,760 --> 00:16:39,360 It's those little things and tweaks that people are afraid to do because organizational change 277 00:16:39,360 --> 00:16:43,920 management or OCM for the acronym lovers out there is a challenge. 278 00:16:43,920 --> 00:16:45,200 Getting your folks to work different. 279 00:16:45,200 --> 00:16:48,840 I've been doing it this way for 15 years in the real world. 280 00:16:48,840 --> 00:16:52,520 Don't make the system slow me down because in the moment, it feels like the system's 281 00:16:52,520 --> 00:16:53,640 holding me back. 282 00:16:53,640 --> 00:16:54,880 You're redoing my gate. 283 00:16:54,880 --> 00:16:57,560 I'm not able to run while I rework on my gate. 284 00:16:57,560 --> 00:17:01,920 But once you get through that and that unlock, it's exponential the results you can drive. 285 00:17:01,920 --> 00:17:04,120 And so I think it's the same thing with your run. 286 00:17:04,120 --> 00:17:09,200 Take that pain out of the business, do a couple pieces of work and to you, high five to you, 287 00:17:09,200 --> 00:17:12,960 just taking a moment to think about how to do it differently and think about it differently 288 00:17:12,960 --> 00:17:15,080 to be able to move forward. 289 00:17:15,080 --> 00:17:19,240 And now people will know that I'm a world class distance runner. 290 00:17:19,240 --> 00:17:20,240 Correct. 291 00:17:20,240 --> 00:17:25,360 I may compete occasionally and usually I come in last place, but participation trophies. 292 00:17:25,360 --> 00:17:29,760 Your knees feel great. 293 00:17:29,760 --> 00:17:30,760 My knees feel like I'm 39. 294 00:17:30,760 --> 00:17:36,880 James, I got one more line of questioning for you. 295 00:17:36,880 --> 00:17:41,720 Let's talk about how the ERP system impacts the broader business. 296 00:17:41,720 --> 00:17:46,120 We work a lot in industrial environments. 297 00:17:46,120 --> 00:17:48,360 We work a lot in other environments as well. 298 00:17:48,360 --> 00:17:51,800 But let's talk about supply chains for a minute. 299 00:17:51,800 --> 00:17:56,720 How does an ERP system optimize supply chain management? 300 00:17:56,720 --> 00:17:59,760 How does it interface with vendors? 301 00:17:59,760 --> 00:18:01,600 Are there new technologies? 302 00:18:01,600 --> 00:18:06,800 Supply chain has been a really big challenge for the last several years coming out of COVID. 303 00:18:06,800 --> 00:18:09,440 What are your thoughts on ERP systems and supply chain? 304 00:18:09,440 --> 00:18:14,440 Yeah, I love that you chose that one because a lot of times folks will come to us when 305 00:18:14,440 --> 00:18:18,480 the ERP is not performing or there's some kind of really core issue. 306 00:18:18,480 --> 00:18:22,360 But this is one that's how do I fine tune my system to be better? 307 00:18:22,360 --> 00:18:28,920 And I'd like to say, our opinion is, can my system today allow me to be successful? 308 00:18:28,920 --> 00:18:31,240 The last thing I want to do is change out your ERP. 309 00:18:31,240 --> 00:18:35,640 I think it's quite essential to make sure your ERP can do what you need it to do today 310 00:18:35,640 --> 00:18:37,800 and then just make the enhancements. 311 00:18:37,800 --> 00:18:42,160 So some of the enhancements and some of the things that helps with is inventory control. 312 00:18:42,160 --> 00:18:44,820 How do I have better real time back to the real time data? 313 00:18:44,820 --> 00:18:50,260 Real time data and visibility into my inventory levels and what I have, really great to have. 314 00:18:50,260 --> 00:18:51,260 Next is demand forecasting. 315 00:18:51,260 --> 00:18:53,960 So not only do I have, but what's coming. 316 00:18:53,960 --> 00:18:57,840 So what do I have coming and what do I have is what do I need? 317 00:18:57,840 --> 00:19:00,600 So now I can derive what do I need in the system. 318 00:19:00,600 --> 00:19:03,360 And the last one is supplier management. 319 00:19:03,360 --> 00:19:06,920 Gone are the days of having to do supplier scorecards outside the system where you sit 320 00:19:06,920 --> 00:19:12,000 in a room, have a conversation, pull out eight reports, do that scorecarding and send it 321 00:19:12,000 --> 00:19:13,000 off. 322 00:19:13,000 --> 00:19:15,040 And by the way, most of the folks don't do that today. 323 00:19:15,040 --> 00:19:20,140 Most folks are actually not doing supplier scorecards, supplier reviews, because it's 324 00:19:20,140 --> 00:19:22,120 such an arduous process to get done. 325 00:19:22,120 --> 00:19:26,480 If you think about the future, one click being able to get that done, now I know inventory, 326 00:19:26,480 --> 00:19:30,700 I know my demand and I know who can provide it to me, really helps that supply chain tip 327 00:19:30,700 --> 00:19:33,760 to tail. 328 00:19:33,760 --> 00:19:37,280 So we're going to wrap it up here in a couple of minutes. 329 00:19:37,280 --> 00:19:41,920 But before we do, funniest ERP story. 330 00:19:41,920 --> 00:19:43,720 Oh yeah, great question. 331 00:19:43,720 --> 00:19:45,400 Can I tell you my funniest ERP story? 332 00:19:45,400 --> 00:19:46,400 Yes. 333 00:19:46,400 --> 00:19:47,400 My most embarrassing. 334 00:19:47,400 --> 00:19:56,000 So I worked for a regional paint company doing ERP implementations as my first job coming 335 00:19:56,000 --> 00:19:58,040 out of owning my own software organization. 336 00:19:58,040 --> 00:19:59,760 I mean, why, why did you ever leave that? 337 00:19:59,760 --> 00:20:01,520 That sounds like an invigorating opportunity. 338 00:20:01,520 --> 00:20:02,520 Yeah. 339 00:20:02,520 --> 00:20:06,200 When you have a business and you sell it, it's amazing how quickly they exit you when 340 00:20:06,200 --> 00:20:07,200 you're a young person. 341 00:20:07,200 --> 00:20:12,760 They get someone, had I known now, then what I know now, different ballgame friend. 342 00:20:12,760 --> 00:20:14,000 I worked for this regional paint company. 343 00:20:14,000 --> 00:20:15,360 And by the way, I worked with my best friends. 344 00:20:15,360 --> 00:20:17,320 I went there and I never worked internationally. 345 00:20:17,320 --> 00:20:21,100 I had like, I'd worked out of Mexico, but did domestic type work. 346 00:20:21,100 --> 00:20:24,440 And so we're sitting there and we're setting up this ERP and we were going to Oracle and 347 00:20:24,440 --> 00:20:28,280 we're going from a custom ERP that the business ran to Oracle. 348 00:20:28,280 --> 00:20:29,280 And I was loving it. 349 00:20:29,280 --> 00:20:31,280 It was the greatest project ever. 350 00:20:31,280 --> 00:20:39,000 So we were a company in Florida, ran out of Mexico using the Mexican ERP. 351 00:20:39,000 --> 00:20:40,960 So Mike, you're a smart guy. 352 00:20:40,960 --> 00:20:45,200 Is the measurement system from the U S the same as the measurement system from Mexico? 353 00:20:45,200 --> 00:20:48,440 I actually can't say that I know what the measurement system in Mexico is, but I'm going 354 00:20:48,440 --> 00:20:49,840 to guess no. 355 00:20:49,840 --> 00:20:51,560 You are correct friend. 356 00:20:51,560 --> 00:20:54,960 We may use gallons and they may use liters. 357 00:20:54,960 --> 00:20:57,240 And so in paint, you have five gallon buckets. 358 00:20:57,240 --> 00:21:01,080 So we set up this paint automation line that was tied to the ERP. 359 00:21:01,080 --> 00:21:05,560 It automatically filled buckets on the assembly line in an automated fashion. 360 00:21:05,560 --> 00:21:07,800 We were amazing. 361 00:21:07,800 --> 00:21:09,720 Except for one little fact. 362 00:21:09,720 --> 00:21:12,120 We didn't realize the system was set up in liters. 363 00:21:12,120 --> 00:21:16,640 And so it filled five liters in every bucket and not five gallons. 364 00:21:16,640 --> 00:21:20,160 For those listening at home, that's a pretty empty bucket. 365 00:21:20,160 --> 00:21:22,440 So I don't like this podcast. 366 00:21:22,440 --> 00:21:23,440 Yeah. 367 00:21:23,440 --> 00:21:25,420 Empty souls, empty buckets. 368 00:21:25,420 --> 00:21:29,160 So we, I run this assembly line, we're so proud of ourselves and they had an automatic 369 00:21:29,160 --> 00:21:30,160 palletizer. 370 00:21:30,160 --> 00:21:31,920 No one's going over to lift the buckets. 371 00:21:31,920 --> 00:21:35,480 So the ownership group comes in the next day like, yeah, man, this is awesome. 372 00:21:35,480 --> 00:21:36,840 You guys got to come out and see this. 373 00:21:36,840 --> 00:21:38,180 We tied it to the ERP. 374 00:21:38,180 --> 00:21:39,720 It's built into the system. 375 00:21:39,720 --> 00:21:40,720 We're great. 376 00:21:40,720 --> 00:21:44,200 And so I remember the owner just like quietly walked over the assembly line and like just 377 00:21:44,200 --> 00:21:46,560 grabbed a bucket, just, you know, like a moment. 378 00:21:46,560 --> 00:21:47,560 Cause I don't know, maybe a photo. 379 00:21:47,560 --> 00:21:48,680 I don't know why. 380 00:21:48,680 --> 00:21:50,160 And realized it was pretty light. 381 00:21:50,160 --> 00:21:52,160 Yeah, that was a rough day for me. 382 00:21:52,160 --> 00:21:53,540 That was a rough day. 383 00:21:53,540 --> 00:21:56,800 So that moment of like flying high photos, great job. 384 00:21:56,800 --> 00:21:57,800 We did it. 385 00:21:57,800 --> 00:22:00,000 Maybe we shouldn't get into why you don't work there anymore. 386 00:22:00,000 --> 00:22:02,800 Sneaking suspicion over here. 387 00:22:02,800 --> 00:22:06,200 The funny thing is they moved me to Mexico and I did it globally for many years. 388 00:22:06,200 --> 00:22:08,720 For the next eight years, I did ERPs globally. 389 00:22:08,720 --> 00:22:09,720 I did such a bad job. 390 00:22:09,720 --> 00:22:11,160 They said, let's do that around the world. 391 00:22:11,160 --> 00:22:14,400 They said, no one's smart enough to do that again. 392 00:22:14,400 --> 00:22:18,400 So that was the funniest moment of like the celebratory, we're killing it to the, uh-oh, 393 00:22:18,400 --> 00:22:19,400 we're in trouble the next day. 394 00:22:19,400 --> 00:22:20,800 So that's my favorite ERP story. 395 00:22:20,800 --> 00:22:21,800 Excellent. 396 00:22:21,800 --> 00:22:22,800 Excellent. 397 00:22:22,800 --> 00:22:25,840 What's the worst ERP environment you've ever seen? 398 00:22:25,840 --> 00:22:30,480 The worst implantation I've seen was this custom application that was built for a business 399 00:22:30,480 --> 00:22:34,200 and it was designed and implemented by one individual who worked at the business. 400 00:22:34,200 --> 00:22:37,880 And it was designed using a very old code base, but it all kind of lived in the brain 401 00:22:37,880 --> 00:22:39,640 of this one individual. 402 00:22:39,640 --> 00:22:43,420 And so, uh, this person had kind of set it up in the way that they thought. 403 00:22:43,420 --> 00:22:47,400 And so like we're used to things like customer master where all the customers are stored. 404 00:22:47,400 --> 00:22:51,520 They had a table where customers and product were mixed together and just some very unique 405 00:22:51,520 --> 00:22:53,200 decisions I would say. 406 00:22:53,200 --> 00:22:58,440 And so this business sold, it transacted and people found out the number of what the business 407 00:22:58,440 --> 00:22:59,440 sold. 408 00:22:59,440 --> 00:23:02,240 And so the first thing that this individual who built this ERP did was go knock on the 409 00:23:02,240 --> 00:23:07,680 owner's door and say, Hey, I need a two X-rays tomorrow or I'm out. 410 00:23:07,680 --> 00:23:12,280 Well he got his two X-rays and then we were brought in to help reduce the spin for that 411 00:23:12,280 --> 00:23:14,600 organization and get that ERP out of there. 412 00:23:14,600 --> 00:23:20,120 It was the most convoluted, complicated detangling of ERP I've ever worked on to get out of the 413 00:23:20,120 --> 00:23:21,120 system. 414 00:23:21,120 --> 00:23:25,040 And so we trusted that one person that really locked them in because they didn't have that 415 00:23:25,040 --> 00:23:26,040 broad vision. 416 00:23:26,040 --> 00:23:30,800 And so when we see IT professionals without a broad vision or a vision to the future, 417 00:23:30,800 --> 00:23:32,320 like we said, at the top of the call, right? 418 00:23:32,320 --> 00:23:37,880 Or the top of the podcast, excuse me, is people focused on business needs and not just solving 419 00:23:37,880 --> 00:23:40,360 IT because it's cool, gets you in a pinch. 420 00:23:40,360 --> 00:23:41,720 That's probably the worst I've seen. 421 00:23:41,720 --> 00:23:46,060 But by the way, three year implementation for a hundred million dollar business for those 422 00:23:46,060 --> 00:23:48,440 that are listening at home. 423 00:23:48,440 --> 00:23:49,440 Interesting story. 424 00:23:49,440 --> 00:23:51,360 I'm sharing those. 425 00:23:51,360 --> 00:23:54,640 So I think we're going to wrap it up for today. 426 00:23:54,640 --> 00:24:00,360 You know, I think we're trying to do every other week episodes of the cast. 427 00:24:00,360 --> 00:24:02,720 Are we calling it the cast or is it the podcast? 428 00:24:02,720 --> 00:24:04,400 I like the cast. 429 00:24:04,400 --> 00:24:10,780 We're going to be casting every couple of weeks here and trying to live by that agenda. 430 00:24:10,780 --> 00:24:16,200 And we're going to talk a lot more about ERP systems, I think in the coming months ahead. 431 00:24:16,200 --> 00:24:19,840 A lot of companies going through that every year, lots of companies are thinking about 432 00:24:19,840 --> 00:24:22,480 ERP changes and system upgrades, et cetera. 433 00:24:22,480 --> 00:24:23,880 So we're going to spend a lot of time on that. 434 00:24:23,880 --> 00:24:25,360 We know it's a hot topic. 435 00:24:25,360 --> 00:24:29,360 So thanks for sharing your thoughts today, James, and look forward to the next time. 436 00:24:29,360 --> 00:24:30,360 Thanks Mike. 437 00:24:30,360 --> 00:24:32,880 Appreciate the time. 438 00:24:32,880 --> 00:24:35,760 Thanks for tuning into this episode of Growing EBITDA. 439 00:24:35,760 --> 00:24:40,840 If you liked this episode, hit subscribe or follow us on LinkedIn for updates. 440 00:24:40,840 --> 00:24:43,040 Got a topic you'd like us to cover? 441 00:24:43,040 --> 00:24:44,040 Drop us a message. 442 00:24:44,040 --> 00:24:46,400 We'd love to hear from you.