Does Your HOME-GROWN ERP Pass the ATTRITION TEST?
Updated: Aug 24
One cannot help but admire the scrappy resourcefulness of entrepreneurs.
When it comes to ERP, I've heard tales of numerous examples of homegrown ERP and business systems in my day.
Usually, they are on a Microsoft Access database. This platform allows a quick and easy start for someone who has the ambition to learn proper database design and loves to “play” with computers. Although, it has its limitations, such as being unfriendly in a multi-user environment.
Yes, I've had several share with me that their guy “likes to play with computers”. So, he or she keeps it up to date and even adds new functionality.
But, I can’t help it. My mind immediately gravitates to the thought...
“Everyone goes on vacation”.
What happened when Larry “went on vacation”?
Please allow me to tell you the completely true story of a manufacturing company and an exemplary employee named Larry.
(The actual name and company are withheld for obvious reasons.)
A well-respected, leading company in a defense-related manufacturing market, was one of only 3 manufacturers of a mission-critical component to support numerous systems for many programs and products that are crucial to the safety and security of the United States of America.
Sadly, this company did not insist on robust documentation to ensure that the product and processes could be duplicated in the event that Larry went on vacation, during which time there might be a hiccup.
Before you ask, yes, they have ISO-9001 and AS9102 Quality Management Systems in place.
Fast forward, Larry decided to retire. They tried to make a go of it on their own. But, to no surprise to anyone, this lauded brand brought Larry back from retirement as a consultant…at a much higher hourly rate.
You would think that they learned their lesson. Sadly, they did not. The number one objective should have been to prepare for the inevitable attrition of Larry. Alas, that did not come to pass.
Fast forward again, although I’m sure that he did not plan it, Larry took the eternal “vacation”. Yes, Larry was no longer a viable resource. Honestly, it was incredibly sad. Larry was a well respected and long-time member of a close-knit team.
As (bad) luck would have it, this company entered the throws of being acquired. The new owner decided to move the operation to a lower-cost manufacturing area. Wonder of wonders, the process struggled mightily to regain its once venerable manufacturing might.
The employees were not happy. The new owners were not happy and the customers were definitely not happy.
Clearly, the process documentation and resources did not pass the attrition test…by a lot… and their market share and gross margin suffered greatly.
Why Should I Care?
We have encountered 6, yes 6, companies in the first 6 months of this year alone, who have their own home-grown ERP.
The most poignant example was a fellow who contacted us in search of a Microsoft Dynamics 365 Business Central consultant. You see, this fellow had built his own homegrown ERP. They operated with it for years, which of course provided great job security for him.
Well, the time came for him to retire and the date was fast approaching. So, as was inevitable, they needed a solution.
The kicker, once they get that new solution in place, he’s gone. Their all things ERP in-house expert will no longer be a resource. They will have an all new system with new workflows, process improvements, and user experience. But, they will have lost their expert.
In a continuous improvement environment, it is Systems Thinking that move organizations, processes, and people to a more self-sustaining operating model.
When the objective is added to each ensure that a process or workflow is to be self-sustaining despite employee churn; a future with long-term stability and higher likelihood of success become the norm.
In the case of ERP, minimal complexity, reduced customization, ongoing training and cross-training, simplified User Interface (UI), documented processes, continual functional and technical reviews all contribute to lower operational risk.
When there is lower operational risk, the employee, customer, leadership, and stakeholder experiences remain high and withstand the test of time.
With ERP it all begins with a system that is simple out of the box, can grow with your organization, and you can expect to be around for a long, long time.
If only we could think of a platform that fits the bill.