Go Live Success!
Tonight, guest writer Christ Kohart shares the ins and outs of how to succeed at ERP in Go Live Success.
How to Succeed at ERP despite what you’ve read!
Time to upgrade your dealer business system (ERP)? In a continuing series, this question was recently asked of you. If you answered ‘Yes’ or ‘Maybe,’ the following information is for you. Approached wisely and thoughtfully by both the dealership and the ERP provider, an ERP upgrade will reap the rewards starting with day one. This article will share one of the best practices that delivered positive experiences for those well-prepared dealerships (and for their business partners). The dealership that provided the bullets below had a successful go-live and continues to thrive on its ERP.
Here are a few improvements experienced shortly after going live on the new ERP:
- Increased accuracy
- Ability to track your dealerships share of customers spend
- Instant, real-time reporting
- Financially close an accounting period within two business days
- Simplified transaction structure
- Immediate updates to global data from all areas of the solution
How were these results apparent so quickly? Preparation, research, planning, establishing metrics, training, and execution. As with anything we approach, properly planned new endeavors have a much higher chance of success than when planning was only at a high level. This article will look at the importance of reviewing processes you use throughout the dealership and then the subsequent implementation of standard processes throughout your dealership.
At this dealership, during the early stages of transformation (before committing to a specific ERP), there was extreme pushback from staff regarding the number of processes requiring review and standardization. There is still the thought process in our industry that “we’ve been successful for decades doing it this way, why change?” I’m going to continue those out who do not standardize processes now, whether or not the dealership is considering digital transformation. Why? If you do not embrace standard processes throughout the dealership, you are not creating consistent, repeatable (and reliably reportable) results. This same dealership demonstrated the fortitude to thoroughly review 300 processes across all business areas (Accounting, Sales & CRM, Rental, Product Support). At the start, many processes had not been standardized between departments (such as purchasing) and locations (“every branch has their individual way of doing it”). At the end of this endeavor, the dealership had created a solid purchasing and purchase approval process and standardized operational processes across their branch network. The first result realized before selecting an ERP: The dealership had the documentation necessary to establish metrics used during the ERP selection process. The second result: The dealership solved their difficulty in capturing and correctly categorizing purchases, whether for internal consumption, resale on a work order (how many times have you received an invoice for outside work & materials long after a work order was closed and invoiced without the charges?), or components that should have been capitalized vs. expensed when installed on prime products?
Let’s address each bullet point and how cleaning up and standardizing their processes affected the outcome after going live:
- Increased accuracy. By creating standards (processes), every manager and staff member creates and enters information in the same format. If your staff doesn’t format correctly, the entry will not be accepted until corrected. You are now reporting on clean, accurate and identically formatted data from all sources.
- Ability to track your dealership’s share of customer spend. Suppose your machine ownership database is accurate (I will save that for a future article). Your employees follow an established process for tracking all sales and activities by equipment (asset). In that case, your ERP can produce a report based on product support sales by specific equipment and customer based on operating hours vs. sales. Telematics can further enhance this activity, and I’ll reserve this topic for the future. The bottom line is that you will gain the insight necessary to increase your product support sales to your customers.
- Instant, real-time reporting. Since ERP’s run in real-time, the overnight batch functions required to update different modules within the business system disappears. A couple of examples: Once a rental contract is created, the status of a rental asset instantly changes from available to reserved; once it’s on rent, status changes from reserved to on-rent. When you close a work order, it updates A/R and is available for review within service history.
- Financially close an accounting period within two business days. You deployed standardized purchasing processes: when goods are received, they are on the books whether or not you have received the vendor’s invoice. In Service, work orders or individual segments close the day after the completion of work, and labor hours are entered and posted each day. Closing periods become more of a final review. The ERP either automatically creates reports or advises management when the period is closed and allows them to create their custom reports.
- Simplified transaction structure. Everyone undertakes the same activity the same way, and fewer steps lead to greater efficiency and fewer mistakes. It also allows personnel to cover/take over other activities as a standard process guide is available. Many ERPs will enable you to upload your process documents directly in the program help files.
- Immediate updates to global data from all areas of the solution. Since you have deployed ERP, information entered in one area updates all pertinent information system-wide. Your CRM connects to Sales, Rental, Product Support, and Accounting instantly. For example, suppose a PSSR makes a customer visit and discovers they are unhappy with a recent rental billing. The PSSR can enter this information in CRM. The responsible rental sales representative, branch rental manager, accounting department, and anyone within the dealership who needs to know are notified instantly. This is all driven by a standard process that drives activity within CRM and, if you deploy it, workflow.
While only one of many steps, it’s incredible how vital the “boring” process becomes when running your business. It’s imperative to undertake this review if you want to have excellent odds to succeed when you go live.