How to Budget for Your ERP Implementation Project

What’s in it for me?

Learn how to create an accurate budget for your ERP implementation project. We’ll walk you through selecting the right ERP tier for your business, understanding the real cost of customizations, and exploring various deployment and licensing options. Plus, see how our pricing calculator can give you the approximate cost of an ERP system based on your manufacturing needs.

Read the transcription

Hey, everybody. We’re going to be talking today about, not specifically about genius, but specifically about budgeting for an ERP product. The intention today is to go through the things, the roadmap of what to consider when you are beginning to budget, not just for money, but also for the time that it’s going to take to get something, search and then also implemented for a product, whether it’s genius or some other product. It’s probably going to be like a 40 to 50 minute presentation. I promise we’re going to try to keep it as short as we can. There’s just a lot of content to be able to talk about this. As I said, nick and I have actually been in the industry for more than 40 years. The purpose of this is to, like I said, give you some milestones to understand what you need to consider when you are considering making a change, but also some of the pitfalls of how things can get stuck. Like I said, the intention is to be maybe not as interactive for the presentation, but we will have an opportunity for you guys to submit questions. There should be a screen on there for when you can see on there at the end, there’ll be an opportunity for you to provide questions.

Without being said, I am going to turn it over to nick so that he can begin the presentation and talk a little bit more about who genius is and why we might be something to consider.

Yeah, perfect. Thanks, Matt. So I promise we’ll get to the budget stuff here pretty quickly, guys. But I know one of the things that’s important on anything like this is to build some credibility up first. So I do just want to spend a couple of minutes doing a little bit of an introduction about genius, who we are and where we sit in the marketplace. And really, that’s just to give you guys a feel for why guys like Matt and myself are qualified to help you guys out with some of the budgeting stuff that, again, I promise we’ll get two here extremely quickly. The first slide here is really just some bragging about us. The left side, you’ll see some badges that we’ve been able to garner from some of the different services that are out there that will rate different ERPs and help people in their searches. And then down the right side are some statistics about the company and our growth. I think the two that I would point out are the first one at the top there, that 96% customer retention. I’ll circle back on that here in a second. And then the 28% growth down there at the bottom.

Those are both really big numbers in the ERP space. Specifically, we talk about customer retention. A lot of ERPs, they’re going to shoot to be in the high ’70s, low ’80s. They get really excited. They get into the mid ’80s for customer retention. So for us to be more than double digits above that is really a big feather in our cap. And this next slide speaks a little bit to, I think, why we’ve been able to achieve that. So one of the things we’re going to talk about as we get into the budgeting side of this is that there are some different tiers, excuse me, of ERPs that are out there. There’s more tier one, generic accounting-based ERPs. And then as you get more into tier two, tier three, in a lot of cases, those ERPs are a little bit more focused. And that’s something for us that we’ve really taken to heart. We’re really built for custom manufacturers, engineer to order, configure to order, make to order. And then you’ll see down there, there’s a couple of features that really are big differentiators for us. There’s a CAD to BOM product. If you guys do any design work in solidworks or Inventor, we can tie that in directly with the ERP.

We’ve got an industry leading scheduling module. If any of you guys are familiar with the theory of Constraints, it uses that drum, buffer, rope methodology. That’s something that we do a little bit different. We’ve got your standard capacity planning available, of course, as well. But that theory of constraints is something that can allow you to think about the scheduling of your shop floor a little bit differently. Then from an analytics perspective, we just released our genius analytics tool within the last 18 months. That’s something for a lot of people when they think about an ERP platform, one of the big things they’re looking for is intelligence out of the back-end. Give me some information that I can use to make high-level business decisions. Do we need to hire more people? Do I need to replace equipment? How can we get better as we continue to grow as a business? That’s one of the big things that we bring to the table as well. Again, not to beat a dead horse on that and spend too much time on the genius side of it, but those are a couple of things that make us unique. This functional coverage slide, guys, this is something that if you have an interest in our functional coverage, I’d encourage you to go back in the recording and look at this.

I’m certainly not going to read through this all with you this afternoon. But we’re really trying to show you guys the areas that we are designed to cover for businesses like yours. And again, the big thing that I would mention here is that we really are a manufacturing-specific ERP. So I know we’re going to talk about budgeting and And general ERP budgeting here a little bit later. But if you’re wondering where genius sits in the marketplace, it really is make to order manufacturing. And within that, even custom, complex manufacturing, engineer to order, configure to order is really our bread and butter. In terms of delivery modes, and again, this is something that as we get into the budgeting portion of the webinar, we’ll touch on this a little bit later in more detail. We offer the software a couple of different ways. You can outright buy the system and put it on your own hardware a hosted environment that’s in your control. You can have us host it for you, which would be a cloud setup. Then there’s also a mix between the two where it’s essentially an on-premise subscription. We refer to that as rent.

Like I said, we’re going to touch on some of the specifics of these different delivery modes and how that would affect how you guys might want to budget for the project here a little bit later. I won’t spend too terribly much time on that. But I would just tell you that if there is a certain deployment or delivery mode that you guys have a preference for, we would definitely have that available for you because we hit on all options there. The last thing I’ll touch on in terms of genius and who we are and where we sit in the marketplace is our academy. This is a big differentiator in terms of our ability to get you from point A to point B during the implementation phase. I know one of the big fears for people going into an ERP project is not necessarily the X and O’s of the software and can this do what we needed to, but can we get this implemented in our business? Are we actually going to recognize the value that we’re spending money on. The genius academy is really built to be able to help ensure that you get from point A to point B.

It’s role-based learning. It’s designed so that as our consultants come out, your folks will have had a chance to do their homework prior to those consulting visits, and you can really make sure that the consulting visit is consulting and not training. Again, we’ll talk about the difference between those two things as we get into the budgeting portion of the webinar. But the other thing that’s really nice about this academy tool is that you’re able to check in on the progress for your folks. You’re not going to have that situation where the consultant shows up on a Tuesday to go through a production scheduling, just as an example with your people, and we come to find out at the beginning of that meeting that no one did their homework there. I can just give you an idea.

Wait, that happens, nick, during implementations and training?

I don’t know if the dog ate it or what happened to it, but it didn’t get done one way or the other. Then this would just give you an idea of what some of those classes look like. It’s instructor-led. You’ll have multiple people in there. It’s something where we’re just trying to give you an idea as to what the visual is going to look like there as you would get into those genius academy classes. Again, guys, like I said, I know it feels like I breached through some of that. For some of you, you might be thinking I spent too much time on it. The truth is we wanted to build some credibility and talk about who we are up front without beating you over the head on that. If anybody wants to learn more about genius, guys like Matt and I will certainly be available after the webinar. But without further ado here, let’s get to, I think, what most of the folks on the line here came for, which is some of that budgeting type information. At this point, Matt, I will go ahead and turn it back over to you if you want to start talking about how these guys can analyze their needs.

That sounds great. With any journey like this, you definitely want to make sure that you know where you want to go. So when we get into the needs analysis side of it, you want to make sure that you take your time to go through. And if you can advance to the next screen, nick. The intention is you need to find out what you need. There’s really three different levels of Many of our customers before coming to genius, they’re like, I really don’t need a full ERP product. I really want to focus on something specific, maybe like inventory. I want to get control of inventory. It’s definitely going to be a far lower cost of entry to get into something like that. The difficulty is that it’s just that one specific area, so it doesn’t really address all the other needs that go along with inventory when it comes to purchasing, shipping, receiving, things like that. It’s a great bandaid, which is the way I would determine it, and And 8 times, that’s all you need. For smaller companies, maybe one option, one feature would be all you need. The second level is that I’m looking for more than just inventory.

I also am looking for maybe accounting and some of these other things. And many of you probably already have something in the accounting side, whether it be Quickbooks or Sage 50 or something like that, or maybe something larger. Like I said, it’s still a useful tool, but it doesn’t address all the other needs. Because if you’re using an accounting product, I guarantee that there are at least 20 different spreadsheets out there with 20 different people using them to be able to manage the portion of their business for order entry or scheduling or something related to that. So it’s that next level But really, eventually, as your company grows, you’re going to discover that I really need something that encapsulates it all. So that’s where that all in one ERP really can help, because it will include the operations side of things. It will include everybody playing off the same sheet here to be able to see what’s actually going on. The one thing that I will point out, and I’m not going to read all these things to you, but just the highlights of it, When you are analyzing your needs, you definitely want to make sure that you get the teams, the different departments that you’re going to include with the ERP.

So if you’re just starting off and you’re talking to sales and accounting, but you’re skipping over the production planning, the purchasing, you’re going to have difficulty finding a product that will really help you because it’s not going to be a complete solution.

I think we lost. Did we just lose you, Matt?

Many times you’re still there.

You’re good. We can hear you now.

Okay, sorry about that. Thank you. I’m going to go and shut my camera For some reason, my Internet is slowing down, of course, on the day of the presentation. But the point of this is that it is something that when you have different departments, you want to get their feedback so they don’t have to keep reentering information multiple times. We also want to make sure, as I said before, that everybody’s playing off the same data so that there’s better communication between the different departments. Like I said, you also want to consider when you are analyzing your needs, exactly what What are the intentions for growth in the future? Is this something that we expect to have triple growth in the next 5 to 10 years? You don’t want to buy something for just one or two years. You want to see what the future holds for you and what you’re anticipating so that you can buy a product appropriately. You want to buy something that you’re going to be able to use for at least 10 years. Then finally, since we are having those departments involved, we will have an opportunity to get the feedback.

This is helpful for nick and myself is to be able to go through. And if you have this, if you haven’t done this yet, I would strongly urge getting an organizational chart together because that will help with companies and software providers that are going to be meeting with you guys to understand how many users, how many are in the shop, how many are in the office, what are the roles of the different people based on the type of work that they do. And it will help to, like I said, streamline the overall process. I’m going to try to turn on my camera again to see if that works, although I know I have a face for radio. Sorry about that. The one thing to keep in mind here, too, is that you do want to work from a realistic selection time frame. Some customers jump into this thinking that, Hey, I’m going to be done with this selection process in a matter of weeks. And that is true. It will be weeks. It won’t be days. But how many weeks will it be? There’s a tool that we have that nick and I can help with.

If you are interested in talking about this, maybe afterwards, that can help come up with a realistic time frame. We can put in, here’s the date that we want to go live. It’ll actually backward schedule for you to say, here’s when you should be making your decision for this. And then it backward schedule some more to say, here’s when you should begin your search research process, and it goes through each one of the doing research, identifying vendors. It’ll get into things like scheduling demonstrations. There’s a lot of that genius, that spreadsheet can help with as well. Like I said, if you’re interested, let nick and I know, and we can definitely spend some time going through it with you. At this point, we are going to ask for a little audience participation, and we’re going to set up a poll here. What would you say is the We have a time frame required to select an ERP product for a company with 1-50 employees. Nick, if you want to go ahead and just present that. We’re going to give you guys maybe 20 seconds to go through and fill that in. Daniel, David, Dawn, Dylan, Kevin, Robert, Roger, Yuliana, Larry, JP.

We got a bunch of people that are… Okay. How’s it looking, nick?

Pretty good. I’m going to give them another 5, 10 seconds here. We’ve still got some responses rolling in.

Okay, perfect.

All righty.

Let’s go ahead and go to this. Display some of the results here. There we go. The The answer to the question is for a company that is usually that one to 50 range, you should expect about 14 weeks to go through and actually do a selection. You’ll notice that it does go up as the number of employees go up in the company. From 50 to 500, you should expect about 19 weeks from 500 plus, it should be 26 weeks. That makes sense because you’re adding more people, more complexity, more departments, maybe more than one company over countries. It is something that we want to make sure that you the time going through and doing this the right way. At this point, what is the right tier? For those of you who this is maybe not familiar, there are typically three different tiers that are available in this market. And tier one is going to be for larger companies. It’s typically a more likely a customized solution. If you’re talking about like SAP or Oracle, these are sometimes tens of hundreds of millions of dollars worth of software that would be used by household names, Ford, P&G, companies like that that are actually having software written specifically for them.

And there are, like I said, you can have something written specifically for you if you have deep enough pockets, but it’s very, very complex. It’s usually very, very expensive. And you’re looking at years of implementation, typically. So that’s something that’s significant at that tier one. Tier two is not as much customization, but it is something that it’s still something that you’re going to have some customization, but primarily it’s going to be something that’s out of the box. And that 10 to $100 million company and revenue would be in that area. It’s not going to be nearly as long as a tier one implementation, but it is something that there’s a lot of complexity and there’s a lot of moving gears in typically a tier 2 product that may not apply to companies that are joining our webinar today. The final one is tier 3, and genius lives between tier 2 and tier 3. Tier 3 is definitely an out of the box solution. It is typically very industry specific. And as I said, genius, as nick said earlier, is designed for engineer to order, configure to order, assemble to order, make to order. So if you’re doing repetitive manufacturing, please don’t consider us.

That’s not what we really are designed for. But there are products out there that do. And that’s something that you should always, when you are talking with vendors, software vendors, ask them, who’s your typical customer? And it’ll save you a lot of time in the implementation or at least the review process because you’re not wasting time with a company that is built for distribution, like a NetSuite or something like that, versus something that’s truly built for manufacturing, like genius. The next slide we’re going to get into some of the factors to consider. This is more of just what nick had talked a little bit about before earlier, which is when it comes to pricing models. We talked about ours being available for on-premise. On-premise, I’m going to get to on the next slide. But Perpetual is where you actually buy the software that lends itself to being on premise is what I was going to say. Perpetual means I typically buy the software, I will have it installed locally nine times out of 10, and I also then annually will pay far less than a typical like a subscription cost. I’ll pay some software assurance or annual maintenance that will be a percentage of the total purchase.

So that’s what’s called Perpetual. Subscription is more, and you’re probably familiar with when you hear people say, SaaS, it’s something that it’s a subscription to use the software, and it’s typically on a monthly basis or an annual basis. Perpetual subscription, we have both. We have I know we are completely agnostic. It’s really whatever you prefer. I will tell you, nick will go through some of the pros and cons, but just to steal some of this thunder, Perpetual is typically a higher cost of entry than Subscription if you have the server and everything set up already, But over time, subscription is useful. Hey, I don’t have an IT department. I’m looking truly to get something that I can use right on the Web. So that’s part of what the two options are. The next slide we have is talking about what I just spoke about a moment ago, which is you can have this when it comes to the hosting model, I want to have it either on premise, like on my local server, or you can have it hosted on the cloud. We, like I said, since we are agnostic on either one of these, if you want to install it locally, it does require Microsoft SQL Server, which is a very common server that you’re going to find most of your IT professionals near you have familiarity with.

But like I said, you are responsible for backing things up, you’re responsible for updates and things like We, of course, would help you. But when it comes to the cloud, that’s something where everything is taken care of on the cloud. We provide and we use Microsoft Azure just as an example. But it’s hosted on the cloud. We do updates with you. And then also when it comes to backing up data, that’s also. The one thing before we go to the next slide, I do want to point out the data is yours in either one of these models. What you’re paying for is truly software and using the software. If somebody’s saying that the data is theirs, run away from that vendor because that’s not the way these models should work. With genius, it’s just the same way. You’re really truly only paying for using the software. Your data is your data. So just something to keep in mind when you start talking to people. The final slide that we’ve got here, we’re going to do another poll in a second, but this is more of, and it lends itself to what we talked about before.

At the tier 2 and tier 3 level, that’s where you’re getting into more of an out of the box solution. And that’s not to say that those out-of-the-box solutions can’t have customization when it comes to reports and forms. That’s actually very common to have those requirements. But the question is, do you want to have something that’s custom written for you that will be far more expensive and unfortunately, far longer to implement? Or do you want to maybe adapt some of your functions to something that’s out of the box? Again, this is getting back to what we talked before, understanding exactly what What type of product fits you best, because 90% of the things that they’re going to have in that product are going to match you pretty well because it’s used by hundreds, if not thousands of customers who are doing the same thing. And so a lot of those best practices make its way into the product. It’s not to say that you can’t have something custom written. I’m sure some of you have custom written products that are out there. They’re maybe at Microsoft Access or some other database. But the risk is once you write it, it’s almost impossible to support it in the future because technology changes is.

The person who developed may not be in business anymore. So there’s a risk to both sides. But it is something that I always want to make sure there’s no right answer here. It’s what fits you best. But the lion’s share of our customers who do come from custom systems are doing it because the person who did it is no longer available or like I said, the data, the technology, unfortunately, is out of date and is not supported on Windows 11 or something like that. The next poll is going to specifically, what are the main reasons why companies implement ERP? And so nick can flash that up. There’s a bunch of different options, whether it’s better reporting, migrating. I’m not going to read through all these guys. You can read it. But if you can maybe take 30 seconds to click into these, and it’ll allow you to just tell us which one you think is maybe a number one poll or number one item on this poll for people making the change.

I realized, guys, we’re giving you quite a few options to read through, so I’ll give I’ll take a little more time on this one.

Thirty seconds is fine. They can read through this fast. The one thing that I failed to mention earlier, specifically as it applies to considering the time frame, The risk of this is that if you don’t take enough time, you might select the wrong product. You might be stuck with something that doesn’t fit. But if you take too much time in the selection process, you might actually go into what’s called analysis paralysis, where you just can’t pull the trigger because there are so many things consider. That should be enough, actually, nick, if you want to go ahead and reveal response or reveal the results. At this point, the number one reason typically is support growth. Most companies are going for some a growth period, and they’ve outgrown their existing system, so they want to be able to get something that will help them take it to the next level. That’s number one. There’s greater functionality is another one, increased efficiency. You see how it goes down. I’m not going to read a single one of these. The one thing I am going to mention, though, too, is that we asked for you guys to select one.

The truth is that there are literally four or five of these that may apply to you guys, or maybe all nine that apply because we’re making changes for a And so it is something that there’s no wrong answer, of course, in this example, but some of the top ones are motivators for people to really make a change. How much pain are you feeling? And that’s usually what causes people to consider making a change. At this point, I’m going to turn it over to nick. Yeah, go ahead, nick. Sorry.

Yeah, we’re good. At this point, guys, let’s get into how you can build a budget for one of these projects. Let’s jump into the meat and potatoes of this here a little bit. The first slide here, what is a good starting point? You’re just getting started on a project like this. It’s obviously going to be a big investment. How do we come up with even number to plan for here. What we’ve come up with, and this is based off years and years of doing this and talking with companies just like you guys and what the revenue is and what the projects look like with us and talking with other vendors in the arena as well, You’re going to want to plan for somewhere in the 1-2% range of your annual revenue. I’ll talk about why there’s a little bit of a range there in a bit. Obviously, 1-2% might not sound like a big range when you’re talking percentages, but when you’re talking about annual revenue, that can be a big gap there. I’ll talk about where you might want to slide in in that range here in a second. But let’s at least use that as a starting point here.

Excuse me. This is just going to prove out to you guys that we can do some math here. If we assume 1. 5% of annual revenue, if you’re a $5 million company, you should budget about 75K. If you’re 10 million, you should budget about 150. And if you’re 20 million, you should budget about 300K. When we talk about the percentage that we’re assuming here in that one and a half %, the question might be, okay, even within that one to two %, where do I land? Well, if you remember those tiers that we talked about earlier, that’s going to drive a little bit of, or a lot truthfully, about where you’re going to land in that 1-2%. If you’re a tier one system, which again, I don’t think we probably have many of those on the line, but let’s just start there, you’re going to want to budget closer for 2%, because again, we’re talking about a really highly customized system that’s going to built specifically for you guys. Anytime you’re talking about that level of customization in any arena, the cost is typically going to be higher. If you’re down at that tier three where you’re looking at truly out-of-the-box solutions and really the only customization would be reports and forms and some minor custom fields in the software, that’s where you would be in that one % range.

Because, again, at the end of the day, there’s not a whole lot of complexity, at least relative to a tier two and certainly a tier one system when you’re in that tier three range. And then one and a half % is if you’re in that tier two-ish level where it’s a targeted system. They’re selling to people that are very similar to you guys and in your industry and have similar needs. But within that, there’s going to be some massaging and configuration of the software to get exactly what you’re looking for. If you’re wondering why we’re showing you one and a half % here, that’s where that example came from. Then obviously, you can slide that down to one % or up to two Excuse me. Again, depending on where you guys would fit into those tiers. The other thing that I would mention, guys, is that this is year one only. When we’re talking about, Hey, for a $5 million a year company, we should budget 75K, that’s not 75 grand a year. That’s for year one, which is going to include your year one for the software, but also all the implementation cost. We’re going to talk about what all goes into implementation costs and how you should budget for that here in a second.

But again, if you’re a $5 million a year company, it’s not 75K a year, it’s 75K for that first year, if that all makes sense to everybody so far. Excuse me. Let’s then get into the cost breakdown and what makes up some of those numbers? What makes up that 75K or 150K or 300K, depending on where we fall on that previous chart. The two big pieces to that are going to be the software itself, which is pretty self-explanatory. We’re talking about ERP platforms. There’s obviously a software component to this. That’s what a lot of people think about when they think about these projects. The piece that doesn’t get thought about quite as much, but is truthfully as important, if not more, is the implementation piece. In your first year, for a lot of people, the implementation is going to be a significant amount of that cost. Excuse me. Those are a couple of things to keep in mind. We’ll talk about what makes up implementation here in a couple of minutes. But just as you’re thinking about the project, those are the two big pieces of what you’re budgeting for and what’s going to make up those numbers for you.

We talked about the software itself, and Matt touched on this a little bit earlier when we talked about perpetual versus subscription models. Let’s go through maybe some pros and cons of both. Let’s start with perpetual licenses. The first thing, and again, just to refresh everybody’s memory, a perpetual license would be we’re going to outright buy the software and own it. We’re going to install it on either our hardware or hosting platform of our choice, but their The licenses that we own. One of the big pros there is that it’s a fairly well-defined cost because the majority of what you’re going to pay for that software has already been paid in year one. You own those licenses, they’re yours. So you’ve got a pretty good idea of what that cost is going to be. There’s typically no continuous subscription. I know there are some systems out there that will try and force you to do maintenance with them. But in most cases, and again, you want to check with your vendors on this, the maintenance is not required. It’s an optional maintenance Agreement. That’s going to cover things like continued access to updates to the software.

There’s going to be some type of a support agreement in there if you need to make support phone calls. Again, you’re going to pay for a percentage of the software, typically somewhere in the 18 to 22% range. Excuse me. That’s going to get you, again, all your updates and then your support contracts if you want to continue to maintain it at that level. Then the last pro here would be that it reduces your long term cost. We’ll talk about why that is as we get into some of the down to the subscription side here in a second. From a cons perspective for the perpetual licenses, your initial cost is typically going to be quite a bit higher. So your cost of entry can be significant as compared to starting a subscription contract. So This is essentially the difference between do we want to have a lot of cost in year one and then a lower cost of ongoing ownership, or do we want to balance that out over the life cycle of the software? You would also have hardware upgrades in management. This is where I always tell people, you really want to know your own scouting report when you start talking about perpetual licenses, because this conversation can be a lot different if you’ve got an internal IT person that’s on staff versus if you’re contracting out to a third-party company where you’re having to pay them each time that they come out.

Because remember, in this case, you are responsible for the hosting environment. If it’s a server that’s in your facility, if you’ve got somebody on staff that can manage that, or if not, you’re going to have a third party that comes in. But each time that there’s an update that the software provider puts out, anytime that Microsoft releases software updates to their server software, that’s all managed by you because the vendor in this case is just providing the software, you’re in control of the hosting environment, and that responsibility falls on you. That would be something that, at least for a lot of people, they look at as a con. As we flip over to the subscription, when you talk about the pros, these models are flexible and scalable. As you guys continue to grow or potentially They have changes with your business, it’s really easy to adjust the license count that you have available with a subscription contract. So even if something happens with the business, and, Hey, we had a tough year, we need to downsize the software, typically at renewal, these guys will allow you to reduce your license count and then bump back up later, where obviously, if you’ve bought those licenses and you own them, there’s really not a whole lot that can be done once you’ve bought them.

Again, we talked earlier about perpetual versus subscription in terms of the upfront cost. So in this case, whereas the upfront cost for perpetual is going to be a negative, the upfront cost for the subscription is typically going to be a positive. Your cost of entry to that solution is typically going to be much lower in year one. Then from a cons’ perspective, you could potentially have increased long costs. Because as time goes on, it’s a subscription contract, and that number is going to, at the very least, stay flat. In some cases, you could potentially see some cost of living increases to that percentage. Year over, this year, you don’t really have full control over what that number is going to look like. I know historically for genius, our year over year increase has been somewhere in the 4 to 6 % range, but it’s definitely something where you want to talk to the vendor that you’re dealing with about what that’s looked like historically, because there are some horror stories out there of people getting indexed at rates that can really compound the year over year cost of those subscription systems.

The only thing that I would add to this is just that. I know there’s a lot in this slide, but this is important stuff when it comes to overall budgeting. Searching for software is one piece, knowing what you can afford is going to be another piece. It’s worthwhile. You’re allowed to ask your vendor, the software vendor, what has your year over year cost increase been? Ask for references. Just ask the reference. They’re going to tell you, Hey, last year, we’ve heard horror stories of 10, 12%. It’s just crazy numbers, but it’s an important question to find out if you’re going on subscription.

Yeah, for sure. The last thing I would mention, guys, on references, and I really think that’s a big thing that’s a key for a lot of the conversations we’re going to have with you guys this afternoon. I’d always suggest to ask somebody for a reference that they’ve implemented, certainly within the last two years, and if you can get somebody within the last 18 months just because in the software world, there’s a lot of private equity investments, there’s a lot of changes that are happening to software companies. The more recent that that reference is experiences are, are going to be more relevant to what you would potentially experience with that company as well. If you’re talking to somebody who implemented 5, 6, 7, 8, 10, 12, 15 years ago, their experience may not be the same as what you guys would see on the on end there. Okay, so let’s talk about licensing models. One of the big things that typically comes up when you’re doing your homework is, okay, we’ve got this narrowed down to a couple of vendors. We really want to do an apples to apples comparison of of the licensing. We want to look at the cost of the software for each one of these guys.

This is where this can be a little bit of a tough thing to come up with, because at the end of the day, not all software vendors license these systems out the exact same way. What you’re looking at on the screen here are two made up examples of how some systems might get licensed. Now, let’s start with option one on the left. In this case, there are three different types of licenses: office license, shop and warehouse license. Based off the type of license that you buy, that controls what features and functions you have access to in the software. In this case, if I have an office user that’s involved in both inventory control and accounting, I only need to buy them an office license, and that gets them both of those features. That’s pretty straightforward in terms of how that works over here. Well, if you compare that to how that works for ERP example number 2, in this case, you’re buying the license is based off the functions. In this case, if that same accounting person that needs access to inventory, I’m now buying them an accounting license and an inventory license. That’s not to say that the left is going to be cheaper, the right is going to be cheaper.

The key here is that they’re different. What I would always tell you is that when you’re talking to vendors, they’re going to put together a quote for you based off what they’ve learned throughout the process. But I would always ask them for their extended price list and give me all of the different options that are available. So as you sit down and really try to come up with, Okay, apples over here and apples over there, you really are able to get as close as humanly possible to an apples to apples comparison there. And it’s not something that you find out as you get into the implementation side. So the big takeaway here, guys, is that everybody license these things out a little bit differently, and you want to advocate for yourselves and make sure you’re asking the vendor that you’re dealing with, okay, what’s behind door number two? What else is not on this proposal that you guys sell so that even if you don’t need any of that stuff, you know what else is out there. And it’s not going to surprise you if even during phase two or phase 3 of the project, those functions that they sell separately become become needed for your organization there.

Excuse me. All right, so let’s talk about implementation. We talked about the two pieces, the budgeting for the software earlier. The software, pretty straightforward. The implementation piece, and okay, what does implementation mean, especially for people who haven’t done an ERP implementation before? There’s really three prongs to this, and I’m actually going to go from right to left here. So Support is your very baseline help with what I would call your standard blocking and tackling to steal a football analogy, some basic stuff. Data migration, we need to move some fields around. I want this column to move over to the right or the left. It’s essentially help that is universal help. They don’t really need to know a whole lot about your guy’s organization to provide that help. It’s very, very basic help support that’s available. From a training perspective, this is where it’s more about helping your folks understand how the software is designed to work and getting them familiar with the screens. Here’s how this transaction happens. If you’ve got somebody that’s an order entry person, here’s how you turn a quote into an order Here’s how you release an order out to the shop floor for production, some of those different functions.

We’re trying to build a strong foundation to the house so that your folks understand how the software is designed to work. Then as you get over to the left side on the consulting area, this is more personalized for your business. Typically, consulting is going to be delivered either physically out at your facility or over a Zoom call like we’re doing right now. It would be one-on-one sessions with that consultant. When I say one-on-one, I mean one to as many people as you would want to bring to the table from your organization. It’s not candid training classes that they’re putting in front of you. This is typically live. This is going to involve things like a business analysis. When you would first sign on with that ERP vendor, they’re going to come out and typically analyze your guy’s business and come up with a statement of work as to how we’re going to get you from where you’re at right now to where you want to be in the new system. They’re going to create a sandbox for you where you can go in and run test scenarios and take some of that training knowledge that you’ve learned and start applying that to how you guys would potentially use the software, and then also scheduling as well.

So not to get too terribly long winded there on the implementation tab, but that should give you a pretty good breakdown of the couple of pieces that we can play there.

Before we go on, though, if we can go back just for a second. I’m sorry, nick. The one thing to point out, though, too, with these is the fact that the consulting side of it is so important because it also depends on the type of company, the software that you’re buying from, meaning that are they Are they direct sales? Are they selling through a VAR that may be regional? We’re biased, and I’m putting on my sales hat right now. But everybody that you talk to, whether it’s nick or myself, somebody on the supporter or the president of the company, they’re all employees of genius, including our consultants. And the most important piece of this is the fact that we do hundreds of these implementations versus local bars who may do five a year at the most, maybe 10. So the point of this is that you also want to make sure that you’re partnering with a company who does implementations, not even just of manufacturing, but just in general, because the VAR may be, I’m more of a distribution VAR, and you’re the first manufacturing implementation that they’ve done. Nobody wants to be a guinea pig, and that’s something that does separate products and companies as well.

So it’s worthwhile. The one thing I did want to circle back on the training, though, we talked about genius Academy and how helpful that is. But if it’s something that you guys, hey, I prefer to have somebody train me, maybe a group of people, we can do that, too. So that’s, again, my sales hat still on. But the reason I mentioned it is because different companies learn differently. So if the genius academy I can speak to you guys. Let’s talk about doing training, whether it’s like this or if we want to in person. There’s definitely options available. I’m sorry, nick. I know we’re 40 minutes into this.

I just wanted to- No, you’re good. The last thing I would mention, guys, on the references is it’s a a good example of where references can be really helpful. Because when you’re talking about direct and targeted ERPs versus buying through VARs, if you’re dealing with a VAR, you definitely want to make sure, Okay, what type of reference am I talking to here? I want to talk to somebody that’s similar to me. I’m a make to order manufacturer, I want to talk to a make to order manufacturer. If I’m a make to stock manufacturer, I want to talk to a make to stock manufacturer. And so, again, I know we talked about references earlier, but at the end of the day, that’s where you can start to pick up on some signs of am I in the right spot or if these guys have taken three shots and they keep giving me companies that are different than us, that’s a pretty good sign that you may not be working with somebody who’s an expert in your guys in your industry there. Excuse me. So let’s talk about contingency planning, right? And this is something that comes up in any budget that anybody ever builds.

Essentially, the fudge factor, right? Where do we need to plan for potential risk of this thing coming in above budget? We’re going to tell you to plan for plus or minus 10 to 15 %. Now, the hope is that it’s minus, but the contingency really is you’re planning for it, excuse me, to be over. And some of the things that can cause that to happen or listed down the right side here. The way that I would sum those up, guys, is to know your own scouting report. When we talk about implementation, the biggest thing that’s going to affect that are the people that we’re dealing with walk into your organization. If you know that you’ve got a group that’s excited about this, they’re all pulling the ship the same direction, and they recognize that this is something that’s to help their business and help them as employees, then that’s where you’re not going to have as high of a risk threshold than if you know that you’re going to have to drag some of these guys along kicking and screaming. You can see down the right side there, a lot of this is about buy-in from your people.

When we talk about process re-engineering, One of the things that comes up is, okay, there’s how we operate as a business, and then there’s how the software is designed to work. We’re trying to bridge those gaps and come together and come up with the best way to operate within the system itself. There needs to be a little bit of an openness to changing some of your processes in-house, especially if you’re looking at a tier 2 and certainly a tier 3 system. Again, we’re not talking about systems that have the ability to do heavy customization and get built around your processes. If you’ve got people who are going to be headstrong about that and they don’t want their processes to be re-engineered, and we’re going to have to come back and go through this multiple times. That’s something that can affect your contingency planning. Then again, at the bottom there, you’ll see your employee’s resistance to change. I don’t mean to make it sound like this would all potentially be because of lack of buy-in from your employees, but really at the end of the day, when we see these projects run over what was budgeted for up front, that really is a couple of the things a lot it gets traced back to that buy-in from your folks.

So again, that’s not to say that that’s the wrong thing or the wrong way for your employees to feel. But I would just tell you as you’re budgeting for this, if you can have a pretty good understanding of the group that your implementation team is going to walk into, that can really help you. It can help you help the ERP vendor, right? Because I know for myself and for Matt, if we talk about that with the prospect on the front-end, I actually just had a call about this this morning, we’ll we’ll build in more time on the budget up front because we know that. So again, that’s some different reasons why you might want to do some contingency planning. Yeah.

I know we only have five more minutes left in this, but the one thing I did want to mention before we went on to the next was, learn the product before you start with maybe customizing. If you go in thinking you’re going to have to customize a bunch of these different areas, just hold off, because many times the process and procedures are coming from best practices from other companies. So learn the product first and then decide which areas need some additional tweaking. Just free advice, something to consider when you’re looking at products. Go ahead, buddy. The next step here is that we’re going to get into building the budget. This is something that nick and I would be very happy to help you guys with if you want. We always want to talk pricing upfront while we’re deciding whether or not genius might be a good product. I’m putting my sales hat back on, by the way. Sorry. Like And like I said, the purpose of this is to be able to understand what an overall cost might be for something like genius based on how many users you think, how many are in the shop.

Do you have field services? Do you have requirements for connecting to your inventor or solid work. There are things that we can help walk you through to give you pricing. This is a tool that we’ve put together. This is how strongly we feel about it. We have a tool available that can help with doing that. Like I said, at the end of this, if you want some interest, we’re going to flash up our email addresses here in just a few moments.

Then at this point, guys, I think we would open it up. If anybody on the line has any questions, there’s a chat function. You can feel free to put those in there. I believe there’s also a way you can raise your hand.

There should be a Q&A. There’s a Q&A as well if you have at the bottom.

Yes. Again, guys, feel free to submit questions. If we’ve got any that through here, we’ll obviously give you guys some time to type those in. We will be happy to address those with you at this point.

Larry is saying… I’m sorry, let me read it. Here it is. How do you… I’m sorry, How do you maintain or how do you keep your schedule for implementation on track? That’s something… First of all, good question, Larry. The truth is that it’s something that we’ve done this often enough that we have the milestone set for implementations. And it’s a way for us to be able to make sure we stick to it. It also identifies who’s responsible for the different tasks. If it’s something that we do, it’s something that we need help from you. When it comes to training, a lot of that’s going to be you guys. But when it comes to setting up the software, when it comes to helping with the conversion of stuff, that stuff that we would definitely help with. It’s something that we can set up milestones. And we also have weekly meetings with the project manager at genius, with the project manager at your company. That we were reviewing our things on track, where do we need help, and it’s a great way to really keep things close. And that’s one of the things, our secret recipe at genius.

That’s part of why that 96 % customer retention is so high, is because you get implemented more of genius than you would maybe with a competitor’s product.

So we got a second question here that asked about travel costs for consulting and essentially how to calculate that. That’s something that I would you talk about with the ERP vendors. Again, it goes back to knowing your folks and who, and I say we, but I mean the vendor that you’re dealing with is going to be dealing with because we could quote two projects that have 30 days of implementation on them. For one of them, two-thirds of those days would be delivered on site, and for the other, it could be as little as six of those days. It’s really about what your folks are comfortable with in the phases of the project. But again, I would just suggest you talk with the individual ERP vendors. The two phases that I would always recommend you have people on site for would be the business analysis and then your go-alive. Those are the two times in that project that you’re definitely going to want to have some boots on the ground. And then other than that, like I said, if you’ve got a group that you feel like, Hey, during a Zoom session, they’re going to be checking their phone, they’re going to be doing stuff, they’re not going to be able to turn off their email, they’re really not going to be focused in, you would potentially to plan for more time to have that consultant physically at your facility versus if you’ve got a group that likes to learn on Zoom, or it may even be that, Hey, we want to break this up into four-hour sessions or two-hour sessions as opposed to doing full eight-hour days.

In that case, the Zoom consulting can be a big benefit there. In terms of planning for travel costs, it’s definitely a conversation I’d have with the vendors themselves because there is no right or wrong answer to that other than, like I said, planning for for business analysis and the go live time, you definitely want to have the consultant there for at least a couple of days for those two stages of the project.

Okay. We actually did it. We got it right at 50 minutes. What’s the next slide, though? It’s just information about us, who we are, if you wanted to reach out to us. My name is at the top there, Matthew Ring. It’s Emring and genius. Nick is there. If you want to say hello, you can say hello to us as well. But please feel free to reach out if you would like to get more information or if you have interest in discussing anything that we talked about today. Please feel free. As I said before, this has been recorded and will be on our website. If you go to geniuserp. Com and you look for webinars, you’ll see that it should be right at the top of the list over the next couple of days. Have access, have at it. If you have questions, please let us know. Thank you all for joining. Nick, if you want to say goodbye as well.

Yeah. Thank you so much, everybody. I know it’s not easy to pull yourselves away for nearly an hour. Like Matt said, please use this as a resource, whether you’re make to order, manufacturer, and selfishly, we’d love that if that’s the case. But even if not, if you guys have any general questions about budgeting for an ERP, as Matt mentioned earlier, we’ve both been doing it for a very long time, and it’s a big decision for your business. Taking the extra time on the front-end to really think about this and making sure you’re planning for it correctly, please do so. Don’t hesitate to use guys like Matt and I as a resource.

Thank you, everybody. I appreciate it. Get back to work. Take care.