Let me start by stating that we are a software value added reseller. In short, we make our living—for the most part—by selling and implementing ERP software and related “solutions.”
So, why would we be telling you NOT to buy a new ERP system?
The answer is simple.
We value our clients’ ongoing success as a contributor to our success far more than we value any one sale and the profits that might proceed from it.
In preparing this post we ask ourselves—these questions:
1. What percent of SMBs are ready to buy a new ERP system at any given time? My guess: something far less than one-half of one percent (< 0.005 of all SMBs).
2. What percent of SMBs could benefit from a process of ongoing improvement (POOGI) at any given time? My guess: very nearly 100 percent.
3. If we can make inroads into that 99.5 percent of SMBs that could benefit from a POOGI and begin helping them make more money tomorrow than they are making today, what percent of those SMBs would begin thinking of us as “their trusted advisor”? My guess: all of them who reap benefits from our POOGI aid to them.
4. What percent of those SMBs whose businesses improve profitability, grow, and expand their market share as a result of our POOGI help are likely to need new technologies as a result of their growth and expansion? My guess: more than 50 percent of them (indeed, virtually all of them, at some point).
5. What percent of those SMBs whose businesses improve, grow and expand as a result of having made us their trusted advisor are likely to buy their new technologies (whether a new ERP, a WMS, an EDI system, BI, or other) from RKL eSolutions? My guess: 100 percent of them.
6. What percent of those SMBs who have benefitted from an RKL eSolutions-assisted POOGI are likely to have also improved their profitability and cash-flow so that they are in a better position to actually spend money on new technologies—and are happy to do so? My guess: again 100 percent of them.
We Would Like to Save You $100,000 or More
And, we would like to make you more profitable while you save that money.
Every year, we read about or otherwise come across companies that have undertaken large traditional ERP projects that were totally unnecessary.
When we say “traditional ERP” we mean the traditional Everything Replacement Project.
Over-promise and Under-deliver
We’ll fess up to it.
Many in our industry—so-called “value-added resellers” or VARs—tend to make no shortage of promises (or what sound like promises) about what their new technologies can do for your business.
Sadly, far too many folks on the buying end of the equation have swallowed these “rule-of-thumb” promises as though they were God’s honest truth.
Buyers of technologies have too frequently believed that if they just “poured in” a new ERP system (or other new technology), it would work like some kind of mystical engine additive for your company.
“Yes, sir! Just add this new ‘Super ERP Solution’ to your company today and we promise that your company will run smoother, last longer and make more money!!!”
By and large, value-added resellers of various enterprise technologies have tended to over-promise and under-deliver—especially in the last decade. (In earlier years it was easier to deliver on the generic promises because many companies were making their first leap into more advanced technologies, and the markets were generally less demanding. Economic times make it far more challenging today.)
Calculating ROI (return on investment) for Your IT dollars
Many VARs and technology sales folks will tell you it’s impossible to calculate hard ROI for the money you invest in information technologies.
While we agree that calculating the precise ROI of IT investments is probably not possible in most cases, we do believe that there is a simple way to get to an “approximately right” calculation of your ROI for any given IT (or non-IT) improvement project.
And, we don’t use “rules of thumb” to get there!
We will take your management team through a process of estimating factors such as:
- Changes in Throughput
- Changes in Operating Expenses
- Changes in Inventory or other investment requirements
Then, applying these factors—in a way that has your management team’s full consensus—we will help you estimate the ROI for your proposed improvement project.
Making Money While Saving Money
In fact, at many client firms, we have helped their management teams discover ways to begin making more money tomorrow than they are making today without any new investment of cash at all!
Doing this helps improve profitability immediately while liberating the cash to be spent on improvement projects that do require an investment.
This can be the beginning of a POOGI—process of ongoing improvement—that helps create a virtuous cycle of improvement, growth and profitability to replace what is often a downward spiral of struggle, shrinking and stagnation.
We help companies discover the New ERP—Extended Readiness for Profit—without thinking they need to do an Everything Replacement Project to get the job done.
This is Part 1 of a 2 Part series. Part 1 deals with the concept that it is possible to calculate an approximate ROI for an IT investment (like a new ERP system). Many in the industry advocate for the fact that calculating the ROI for IT system is impossible to do.
These articles represent two aspects of the same subject—one looking at it from the East, while the other views it from the West, so to speak.
We would like to hear your thoughts on this matter. Please leave your comments here, or feel free to contact us directly, if you prefer.
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