S4E20 | Why ERP Phase 2 Never Happens (And How to Make It Count)

Peter Nicholson (00:00)
And welcome back to the ABCs of ERP and Beyond, the show that looks at ERP from three different seats. Most ERP advice comes from one chair. It's normally the partner who sold it or the user that just got stuck with it. Well, we try to triangulate that. We've got Narav Shah, he gives us the partner view. He's at AdCirrus ERP and implements ERP for a living.

And I come from the nerdy data and systems side inside a business that runs one of these day-to-day. And finally we have Emily Browning who keeps us honest and upfront on business process and project management, the people and the workflows these systems are actually meant to serve. Now, at some point in every ERP project, someone says that famous quote, we'll pick that up in phase two.

And everyone nods because it's the sentence that lets the room stop arguing at the time. No one has to deal with it. And we'll deal with it at a later date. And that never that date never comes around. When you go live, everything works, some things not brilliantly, but orders go out, invoices go out, and everyone slowly forgets about those items that you said were gonna be dealt with in phase two. And today we are going to have

an informal chat around phase two phase two items what things go into phase two when should you start looking at phase two items and what the hell do we mean when we say phase two So with that hello welcome back both.

Nirav Shah (01:25)
Hey, hey.

Emily Browning (01:25)
Hello.

Peter Nicholson (01:27)
so phase one. So phase one, we know what phase one is, right? We say the things that have to be in place on Go Live that allows the business to run. We have to be operational, we have to be able to accept customer orders, get stock out the door, get paid for them, all of the fundamentals of operating business. I think that's pretty pretty clear. I think also it's the division between the things that you must have day one versus the things you would like to have day one.

And often times the the whole reason why we have phase one and phase two f the way I see it is that often those things that people would like to have end up getting more space over the things that are phase one, right? Some of the core processes like being able to s submit an invoice and stuff like that is kind of boring. But you have to do it. It's a requirement of running a business. And a lot of the

Emily Browning (02:17)
Mm-hmm.

Peter Nicholson (02:17)
end users, you know, you're trying to get on board, you're trying to get support and

build up enthusiasm for the project when you start kind of dangling these carrots of it'll be great when we can automate this awful admin that you hate that's the phase two stuff and they want it they want it straight away but we have to kind of say well hang on let's get phase one done and then we'll have a look at phase two. So when we talk about phase one being the go live stuff what

What kind of things, first of all, for the people that might be listening and and hearing this for the first time, what kind of things would we put into this phase two? What is phase two items made up of?

Nirav Shah (02:59)
Yeah, I got I could ramble off a few things off the top of my head. have WMS handheld projects, right? you could have an e-commerce integration potentially. You could have portals, various different portals, vendor portals, customer portals. You could do a shop floor data capture project as a phase two potentially.

container management. If you track containers, that could be kind of a phase two. You could get by of doing things in in phase one. So really phase one is, you know, what can we get by right now to get the system up and going? But knowing that there's a phase two opportunity where we could add additional functionality to the current process that

at that moment they feel like they desperately need, but, you know, they don't maybe have the budget or they don't have the bandwidth to take that specific project on. are kind of a few some things that I could just, you know, that at least from our experience that we've noticed are more appropriate phase two projects that sometimes happen and sometimes don't happen.

Emily Browning (04:01)
Mm-hmm. I think a lot of the little little automations that come with a modern ERP, you take some of them. Some of them it makes sense to set up, it keeps it all very intuitive. But when you think about, I would call it the minimum viable product is what should be your phase one, maybe with one or two really high value, high impacting extras. so then then I would be considering how much change can this business

handle with phase one? Do we want to get them used to the new system before we start thinking about well, how should this this automation work? And it can be pretty small things. You know, it can be, you know, just the automatically emailing of the invoices to your customers and and things like that. But maybe that requires a, you know, a whole bunch of understanding around your data and, you know, the

Billing contact versus the shipping contact. You know, do we have everything in place for that? And do we have time to deal with that in phase one or is that going to delay phase one? Did our old system do it? No, then we don't really need it in the new one on Go Live Day in phase one, but it would be great to have it in phase two when you start really beginning to optimize and like make the most out of your new and modern ERP. but yeah, I say that with the caveat that.

Think you should put a bit of that in phase one if you can identify where's

Nirav Shah (05:19)
Mm-hmm. Mm-hmm.

Emily Browning (05:21)
where's that high impact, where what little things should

Nirav Shah (05:23)
Yep.

Emily Browning (05:23)
we change? You know the content the concept of let's go paperless. Let's go paperless, I think, tends to be phase two. And it's where things like

Nirav Shah (05:31)
Mm-hmm.

Emily Browning (05:31)
you know, WMS and you know, your you know, electronic pick lists on your scanners, and even even agreeing that we're not gonna put we're not gonna put a

printed pick slip in anymore. We're going to email something to the customer. All of that takes takes a bit extra and can easily sit in phase two. And is the type of thing you should implement. Should

Nirav Shah (05:51)
Mm.

Emily Browning (05:52)
you manage to make phase two ever happen.

Nirav Shah (05:54)
Yep.

Peter Nicholson (05:55)
There's gonna be a bunch of stuff that you might you might think of phase two. If this is your first ERP and you're coming off a super manual system with connected s Excel spreadsheets, or you're

Nirav Shah (06:06)
Mm-hmm.

Peter Nicholson (06:06)
coming from disconnected systems, I think there's gonna be a few items that you might think of phase two that actually you get for free because that's just how modern ERP works now.

For example, if you're a manufacturer and you're used to you know editing a spreadsheet to say that you've consumed certain raw material when you've made it into a finished good, you could say if for the uneducated business, you could say, it'd be great if we could automate that. And I now

Nirav Shah (06:35)
Mm-hmm.

Peter Nicholson (06:36)
that that's just backflushing of raw material. You get

Nirav Shah (06:39)
Yeah.

Peter Nicholson (06:39)
that without having to to do anything. And there's gonna be times like that that

I think a good partner is worth their weight in gold when they can strip out one the bullshit of fantasy land of end users wanting everything versus stuff that is genuinely phase two versus stuff that's genuinely minimum viable product stuff that you have to have. And then this other one, which is like

Nirav Shah (07:02)
Mm-hmm.

Peter Nicholson (07:04)
these improvements you just get from inherently being on a modern ERP.

Emily Browning (07:09)
Mm-hmm.

Peter Nicholson (07:10)
I think they s I think a lot of people are gonna be surprised. If you're moving on to your first one, I think a lot of people are gonna be surprised with how much an ERP does in the back end that used to be recon manual reconciliation by teams at the end of the shift.

Nirav Shah (07:23)
Yeah. I think, you know, Emily hit the nail around the head, the minimal viable product is, you know, a concept that I feel like gets lost a lot of times, you know, in like the the heat of an implementation and all the details that are being flied around, you know, on what could be stripped back and become a phase two versus, you know, in in and what could be phase one. And sometimes

If you go, if you overextend yourself, right, phase one never actually finishes. It becomes

Emily Browning (07:52)
Mm-hmm.

Nirav Shah (07:53)
just a continuation year, year and a half, you know, project, almost even longer, because things just get added to phase one instead of having to be broken apart, right? And that's sometimes a fear, and we've we've seen in implementations that phase one never actually gets to completion, right?

And that pushes out the goal life date, that extends the budget, you know, it just in introduces a lot of a little bit more chaos than you need in a project. So to know what phase one actually is and don't deviate from that minimal viable product concept, that's gonna get you live sooner, but then also give you a clear understanding of what phase two is.

And when you should approach it, right? And what stability looks like after phase one.

Emily Browning (08:46)
think it's really defining that scope and our goal at the beginning and recording it is also important because I think sometimes you need to be able to point back to some evidence and say this this is what we scoped out and and here is the reason behind it. so then to to what Narav said, it's avoiding that scope creep, making sure you don't add add and add. You set that

Expectation at the beginning and then you stick to it, you can kind of repeatedly refer back to it. That's almost how the you know the the language of phase two is really valuable because it allows you to you know, I don't quite want to say bat back those points and say, we'll put it in phase two. Like you do, you do have to mean it, but it gives you this language throughout the project with your business users, to say, you know what, that's not.

That's not part of our minimum viable product. It's not part of our our original scope. We can go live as we planned. but let's add that into phase two. I have a theory that the reason phase two often doesn't happen or doesn't happen in a timely manner is that actually that list of stuff that we thought is what we really wanted doesn't quite have the same impact that we thought it would after we go live, because business is now way better.

you know, our processes are better in our new system and our list of stuff in phase two becomes just a lot less important to a point. There'll be some good stuff in there, but there'll also be a bunch of stuff that now probably doesn't matter that much because a lot of other things we do are very easy. So something I've been thinking about recently is I think that phase two probably needs a whole redefinition. It's sort of a good

you know, backlog of ideas and it's great to have it and it should be recorded. But you could think of phase two as, okay, we're live. Now let's start thinking about, you know, real needle moving stuff that we can do with the CRP now. What is the full potential of this new system that we have? What can our business look like? And I personally

Nirav Shah (10:48)
Yep.

Emily Browning (10:48)
think at that point,

redefine phase two. In fact, maybe don't call it phase two throughout the project. We could, you know, call

Nirav Shah (10:53)
Mm-hmm.

Emily Browning (10:54)
it our backlog of ideas or whatever, or something less IT sounding so that it fits for the business. But phase two, I don't think should be now let's implement, you know, all these straggler ideas that we came up with but didn't didn't implement. Because you don't quite

Nirav Shah (11:10)
Yeah.

Emily Browning (11:10)
have the buy-in for it. I've only only been recently thinking about this, so I'm curious to know your thoughts on that.

Nirav Shah (11:17)
that is one hundred percent true that the impact and what we expected out of phase two value doesn't seem to be there. But there's a couple reasons for that. One could be that the people that were deciding for phase two are no longer there. The

Emily Browning (11:33)
Mm-hmm.

Nirav Shah (11:34)
there that there's a change in project team.

Internally, maybe the sponsors has have left, right? From the customer. a key user has left from the customer. So that champion that was gonna

Emily Browning (11:45)
Mm-hmm.

Nirav Shah (11:46)
go ahead and help implement that phase two feature module, whatever, is no longer there. So it's no longer top of mind. And that pain that we thought we were gonna solve for phase two just gets absorbed. Like, okay, this person is left, we're just gonna continue doing what we're doing.

And that visionary, that vision thought, that person, you know,

Emily Browning (12:09)
Mm-hmm.

Nirav Shah (12:10)
can't there's nobody there that could execute on that vision anymore. So a lot of that happens, you know,

Emily Browning (12:16)
Mm.

Nirav Shah (12:16)
probably more often than you know, saying that we are that we want to do phase two is that we're ready to do phase two, but the guy has left. That vision is no longer there. So we're just gonna we can't hire someone just for this particular, you know, project that has WMS experience, right?

So that that is a big curveball in the project.

Emily Browning (12:35)
Mm-hmm.

Nirav Shah (12:35)
And that's things that I think like customers should start pre planning for, right? They should plan for that in phase one, saying, what happens if so and so leaves? What happens that this occurs, this particular scenario occurs in the business? How can we make sure that this

really strategic objective that we have to implement this module still stays in place and it doesn't get lost. Right. then you are staying proactive instead of being reactive and that project gets done ultimately. You gain you gain the value out of that, whatever phase two looked like at the end of the day. So, you know, there's a lot of different pieces to that. part of it i is

Is that the like you mentioned that the value is no longer there? but also the value is not not there because people leaving, maybe the publisher has done something, or maybe even the VAR, like ourselves, right? Maybe the person who initially did the original implementation is no longer with the VAR anymore. So a lot

Emily Browning (13:33)
Mm-hmm.

Nirav Shah (13:34)
of that change has got that that knowledge, you know, could be potentially lost or gone. And for the customer, it's scary to bring in a new consultant to

continue on and carry on phase two because like this guy just doesn't know. This person doesn't know my business, right? It could be a big scope creep. So, you know, there's there's a lot of lot of things there, on on the phase

Emily Browning (13:52)
Mm.

Nirav Shah (13:53)
phase two aspect of it. But yeah, it's it's a it's a huge deal.

Emily Browning (13:56)
Mm. And how do we handle that? How do we plan for that in a business? Pete, your thoughts?

Peter Nicholson (14:00)
I was trying to think of the things why why phase two wouldn't happen. And I started to think about that when you called it a backlog. And I think whenever you have this big backlog, not

If you don't put a date to that backlog, it's just gonna sit there as just this list of stuff that you never dealt with during the project. So I think one of them would be not having a date on it. And I think that kind of links to Nirav's point there around you know, n kind of not having the team if they leave. But I think also you it

You d you just don't have the team that you had during the migration anyway, because you may have identified the super user in the business. The one that, you know, we've spoken about what a s a good super user is, is someone that peop other people look up to, seem seems to be a leader, has the enthusiasm, has the skill to learn the new system quicker than everyone else, can has the ability to teach others how to use the system, stuff like that. After GoLive, they just go back to their normal day job, then they actually never left.

and now you're asking them to be, yeah, we're gonna start looking at the face two, like, can you be the super user for that as well? and of course on the on the partner side, you know, that that the partners implementation team, they're just gonna roll on to the next client.

So when you come back around eighteen months later on to look at your phase two stuff, you're probably just gonna get whoever's whoever's free, whoever's free from the partner to be able to do it. And they aren't gonna be the people necessarily know your build who weren't there on those difficult decision making meetings to to s have the full context of why stuff was put onto phase two.

and I think that then rolls into this this other thing and I was thinking about back to the episode that we recently shot around your second ERP is not as bad as your first ERP migration. And one of the pushbacks we said was the team going, we're not gonna go through that again. And it's easy to think of a phase two like that. It's like, my god.

Everyone's tired, right? You know, there's reluctance to voluntarily do that again. there's this huge backlog and that people are like, yeah, I I remember that. I I remember saying

Nirav Shah (16:11)
Yeah.

Peter Nicholson (16:11)
about that and it just got parked and it got dumped so we didn't have

Nirav Shah (16:14)
Yeah.

Peter Nicholson (16:14)
to argue about it now. Now we're being told we have to argue about it. I can kinda start

Nirav Shah (16:19)
Mm-hmm.

Peter Nicholson (16:20)
to see

some realistic reasons why phase two never actually gets done. One, you don't put a date to it. Two, you haven't got the team. And even if you had the team, they might not necessarily actually have the appetite to to go again.

Nirav Shah (16:33)
Mm-hmm.

Mm-hmm.

Emily Browning (16:35)
I agree with all of it, but if that were the case, then why then why don't we plan phase one and phase two as part of you know as part of the whole project in the timeline? So, you know, we get to the cutover and go live and we do, you know, two, three months of hypercare. And then maybe, you know, for a little buffer, we plan in another two, three months of just getting used to the system or not, but you're good. and then and then we have phase two planned in with the team, like why.

Why don't we do that? I I think it's because our our needs, the things that will really bring value to the business, change a bit once we've got the new system. So it's not that our backlog does not deliver value. It could it could be a little bit that we don't quite understand it so well anymore. Because if something sits okay, it may maybe it doesn't have a date, but if something can

Nirav Shah (17:24)
Mm-hmm.

Emily Browning (17:24)
sit in the backlog for a couple of years, that's when I'd be saying, Should we even do it then? It's

Peter Nicholson (17:29)
Yeah.

Emily Browning (17:30)
fine that it's if

If it's that

Nirav Shah (17:31)
Right.

Emily Browning (17:32)
old, why don't we just get over it and let let's reassess. so I I think I think it's all of these things. It needs it needs good planning, it needs the people, it probably needs some HR business partnering in there as well to make sure that's, you know, the people resource is really part of your plan. But I think there's a reason we don't really plan in phase two as part of the project.

a alongside phase one. Or I've certainly never seen it done that way. I don't know if you have Nirav and a and then actually seen it come to fruition.

Nirav Shah (18:00)
Yeah. I

yeah, no, fruition probably happens four out of ten times, three out of ten times,

Emily Browning (18:06)
Mm-hmm.

Nirav Shah (18:07)
to be honest. I almost feel like prior to a phase two, you should do a a brand new process map of your business.

Emily Browning (18:13)
Mm-hmm.

Nirav Shah (18:13)
The solution is not always to throw more software at problems. Sometimes the solution is, hey, do we got the right people in the right place? Right? Do we have, you know, our inventory in the right places? before we say, let's embark on on phase two, right? Are we solving a specific problem? And if we're not solving a specific problem,

I think phase two just ends up being another pain in the rear end for anyone that's part of the project, right? Because everyone's gonna say, why change something that's not broken in their eyes? You need to first do that process map to identify those pains that justifies the phase two project, which is gonna be new software. And when you could do that and get people on board to take ownership, that yeah, this phase two is specifically designed to help you.

And it's gonna help you X, Y and ABC reasons or whatever, you're more likely to get higher adoption than saying we were gonna do a phase two just because we have that already as part of the original implementation, right? Phase two, start you should start planning that during phase one. Now that might sound like really bizarre. Like what we're gonna start planning for phase phase two while we're not even done with phase one and we have to go through hyper care and we gotta do all this. But it's not planning it the same way you'd plan phase one.

It's like keeping it in the back of your mind, saying, you know, are we setting ourselves up for success for phase two to actually solve a problem in phase two? Right. And and and do we can we measure that problem? because just I always feel even selling ERP, just to sell software to sell software, to throw up soft problems, software at problems doesn't solve that problem. You have to know what you're actually solving.

Peter Nicholson (19:57)
I think at least phase two audit should be done. either way, phase one, go live, hyper care, everyone will need a break from each other. It's just human nature. Right? You've been in this intense project for a while, you just need a break where no one speaks about ERP for a bit. But you should definitely put in the diary at least an audit of phase two. and I was thinking around

when you've been speaking about this, I think we keep saying about phase two and the things that would go into it. It sounds like a lot of the phase two stuff is optimization of business processes rather than just the system itself. And the nice to haves that might enable better customer-facing metrics, might enable growth, might enable us to

service more end user markets it's this kind of stuff so it makes me wonder about who should be driving phase two because we say that I the this isn't an IT project this is a business change thing it helped facilitate it do the technical work get it working and stuff but if that's done the technical side is done data migration is in we can process orders we can ship we can invoice

If phase two is all around business optimization and and routes revenue growth, should it still be so IT not IT led, but should IT have such an involvement? Who's the person that initiates the guys? We need to revisit phase two stuff. Is it now down to the business?

Nirav Shah (21:29)
Mm-hmm. I think so. I I think phase two is a purely business driven decision, I feel like.

Emily Browning (21:35)
Mm-hmm.

Nirav Shah (21:36)
and again, you're solving real problems, right? And some of those problems could be problems left over as part of phase one, right? That are you're solving in phase two, which is completely normal and fine. I don't think an ERP, I I tell all customers, you're not gonna solve all your problems on a phase one project. It's just not gonna happen.

Right. Some problems gonna be left for phase two. Sometimes in a phase one project, you might actually feel like you're going backwards in certain areas in certain modules. Right? You're maybe adding a few extra steps, but you gained a like 20 or 30 or 50% efficiency in another area of the software. It happens. You're buying an off-the-shelf solution. It's not fully customized for you yet. So you have to be aware of that fact. And then

Kind of phase two saying this, you we're gonna solve for maybe this few extra steps to be added in this particular module or process at the end of the day. it's it's very normal. You have to be realistic. Never you're not gonna solve the rules problem for phase one. You know, phase two is where you really are gonna fine-tune it, stitch things together a little better. And, you know, as long as the MVP minimal viable product for phase one got you off the ground, you're able to do your financials, your invoicing.

caught you completely off your your your previous legacy systems. Everyone's working in one system, your data's getting cleaner, everyone's getting comfortable and settled in into the new processes is kind of when you peek in and say, All right, now we're really, you know, ru ready for a phase two project, but start planning that out while phase one is going on. That these are things that we will solve for you in phase two, just not going to be there in phase one.

Emily Browning (23:11)
Yeah, I think the bottom line is kind of that your problems evolve, you know, through phase one and after that go live. The the business processes are a bit different now. So the way your problems hit are going to be a bit different now, which is why that sort of audit, that revisiting, that business-centric view of what is phase two, I think that would change a lot. And if I look back to how to projects I've been involved in, I don't think we've ever really looked at phase two.

that way maybe until you know now. But certainly earlier in career it was just very much this backlog of leftover stuff that we need to work to with never really any kind of revisiting. So of course it doesn't happen. So yeah. Good. We've solved it. Thanks everyone.

Peter Nicholson (23:57)
Ha ha ha.

Nirav Shah (23:59)
I I don't I don't think

I don't think we should abandon phase two, right?

Emily Browning (24:04)
No.

Nirav Shah (24:04)
I think phase three and four, those are even those are probably viable projects, right? As your as your business is growing. But phase phase two, yeah. Phase

Emily Browning (24:10)
Yeah, so let's not yes. Don't call them that.

Peter Nicholson (24:10)
Don't even say it, but

Nirav Shah (24:15)
two I think is a critical juncture in your ERP journey and lifecycle of the business.

Cause if you look at QuickBooks and you look at these other solutions that are out there, there's only one way to implement

Emily Browning (24:28)
What?

Nirav Shah (24:29)
those, right? And a lot of customers get kind of, I guess, in that mindset. Once it's in, it's in. And we don't have to look at this again at the end of the day. But instead, with an ERP system, that's the whole purpose. Is there's so many ways you could go ahead and implement. There's so many different ways you could take advantage of.

improving your business with an ERP system. Phase two, I think, is really where all the value is. I honestly think is where you can make a ton of really good improvements and really

Emily Browning (25:02)
I agree.

Nirav Shah (25:02)
impact the bottom line. Cause you know so

Emily Browning (25:04)
It's your full potential.

Nirav Shah (25:05)
much up to the, up to the, up to that point from phase one. And phase two is really driving home that value.

Emily Browning (25:11)
Agreed.

Peter Nicholson (25:12)
I would point wanna put a warning to say that anything you as the business put as phase two if phase two are business processes, I would definitely recommend that you run every phase two item, everything you put on your parking lot, to your ERP partner because they're gonna know whether it's gonna fundamentally impact the configuration of the ERP in phase one. There may be a phase two item that involves that would involve a complete rewrite of the chart of accounts.

Right. And then hopefully

Emily Browning (25:41)
Mm-hmm.

Peter Nicholson (25:42)
your ERP partner might push back and go, hang on guys, like if you really want this, if you think that this is something that we need to do it now because it's gonna be so costly if we do put this as a phase two. especially not only just like a r a fundamental rewrite of, for example, the chart of accounts setup, or

Anything that would touch transactions because when you're going through the phase one, you're going into a clean ERP with no transactional data in it. When you've got phase two items, you're gonna be working on an ERP that now has posted ledger entries in it. and you might find, I hope,

If you do, your partner would recognise that and say, Hmm, maybe okay, yes, normally this would be a phase two, but it's worth actually doing in phase one because it's gonna it's gonna be c cheaper to do it now than i if we revisit this.

Nirav Shah (26:38)
Yeah, exactly.

Peter Nicholson (26:38)
I don't know. Nirav can think of things

that would that would warrant putting into phase one? Like that?

Nirav Shah (26:43)
Yeah,

I think, you know, s like if you're moving from manual sales tax to a cloud service sales tax, you know, VAT

Peter Nicholson (26:50)
Yeah.

Nirav Shah (26:50)
GST provider. I think that's a great phase one improvement for your business, right? Instead of manually having to file those taxes and stuff, you know, these these SaaS platform solutions that do taxes, they do a great job. I think that's something that's really easy to implement in a phase one environment. you know, a few other things that could that could help us is is maybe

using out-of-the-box financial ad hoc reporting instead of like exporting and manipulating that data and publishing financials. Well use what's out of the box. Implement, you know, spend an extra 24, 32 hours, try to, you know, implement that balance sheet, income statement, the Proforma Sales Report, your cash flow statement, all out of, you know, your new ERP system. I think that goes a long way. you know, being able to maybe do reminders

you know, finance charges, electronically sending POs to to your vendors, right? Instead of downloading them and maybe, you know, doing doing things that are a little bit more manual, prior part of that cross-references, barcoding is one that I feel like is is a good phase one. Like, you know, if you don't have barcodes, let's go land the project for phase one, because that's going to be a preparation for phase two that we want to do. Let's start

Peter Nicholson (27:57)
Mm-hmm.

Nirav Shah (27:57)
barcoding our bins, our locations, our products,

Emily Browning (27:59)
Mm-hmm.

Nirav Shah (28:00)
right?

AP automation is a good one. That's pretty easy to implement. You know, instead of you getting emails or snail mail invoices potentially, and you have to manually key those in and then age those APs. Well, create a centralized email box. Receive all your AP invoices there. Do a one time mapping to your AP invoices. Go and automate that process. That's something that could be really quickly implemented for a phase one. So you know, that's a partner's responsibility. That's a partner's job.

Customer doesn't know better, right? Partner is there to help bring the value of the ERP to the customer and say, hey, Mr. Customer, have you thought about this? Have you thought about that? Right? Here's what other customers in your industry have done. Right. So if your partner's not doing that for you, number one, there's a problem there. If your partner's just like kind of lacks a data goal and they're saying, stand sitting back and saying, Hey, you guys tell me everything that you guys want, and we'll just give it to you the way you want it, I think.

You know, that's that's the partner not doing their job. where there has to be a two-way communication here. And that two-way communication is, okay, Mr. Customer, this is the way you're doing something right now. But the ERP system, the software also allows for these additional capabilities. Let's talk about it. You know, does this warrant us to do this for a phase one project, right? How important is this for you? So, you know, those are type of the things that, you know, just really quickly off the top of my head, I could think that you you wanna, you know.

Bust into phase one really fast and leave maybe some of the more heavy lifting items. Maybe EDI is something that maybe you could you could you could fall back on phase two potentially, maybe not. Same, right? Or or full handhole, like I said, bar. Scanning could be a could be a phase two. portals could be a phase two, maybe potential project. it you you could do BI reports, maybe could be a phase two. I know, Peter, you don't want to hear that. Please don't hold this against me. Don't don't don't

Peter Nicholson (29:45)
I I would say I'd completely agree. No, I I think all all reporting

is in phase two. The team have to use native ERP reports and get used to them.

Emily Browning (29:52)
I I I don't know. I

Nirav Shah (29:52)
I yeah. Yeah. Yeah.

Emily Browning (29:56)
I think if you in your old system have like hundred and twenty reports that supposedly all need to be replicated in the new system, I'd be thinking, well hold on, what what do those do? Let's let's at least take a step back and think about should we do that or should we should we think about this? So I do I do mostly agree with you, but

Just so we don't make it sound like replicate all of your crap. Don't do that. At least at least think about it.

Nirav Shah (30:24)
Yeah, yeah.

Peter Nicholson (30:27)
I think almost all of reporting goes into phase two. One, you'd be surprised of the the functionality of a new ERP and its reporting functionality. The only stuff that

Phase two phase one reporting would be if you're talking to a larger data warehouse that consolidates data. But that's an IT issue. That's not gonna be an end user issue. End users need to be using as much of the new ERP as they can. and I can speak of experience with hundreds of reports. And I know it I've done litmus tests on some where I've turned off the automated refresh on one.

A report that someone a team said that we use this every single day. I turned on the turned off the scheduler that runs it. And finally after about four months, one of them said, Hey, this report doesn't seem right. It's got stuff that I know that we've already shipped. Right,

Nirav Shah (31:15)
Mm-hmm, mm-hmm.

Peter Nicholson (31:16)
yeah, I I haven't run it for four months. You told me it was a critical thing you use every day.

Nirav Shah (31:20)
Yeah.

Emily Browning (31:21)
Mm-hmm.

Peter Nicholson (31:21)
so a lot of these you could they will die. They will die. And also if we go back

Nirav Shah (31:25)
Yeah. Yeah.

Peter Nicholson (31:26)
to the stakeholders, you know, the people that a lot of the reporting gets reported to, they go, hang on, haven't we just spent like a quarter of a million dollars on a new system? Why are you still sending me this this shitty Excel file that we've been using for ten years? yeah,

Nirav Shah (31:39)
Mm-hmm.

Peter Nicholson (31:40)
we just hooked up the new ERP to it. great. It looks terrible.

Nirav Shah (31:43)
Right.

Right.

Peter Nicholson (31:45)
Other items that are in

phase one that can also happen in phase two. we mentioned WMS right at the start. I think it's important that if the business is moving from one ERP to another

look at the stuff they're already using. So for example, if you're a business that already have a barcoded warehouse, you're already using a WMS, I think it's gonna be more painful to teach that warehouse team how to now sit behind a desk and do all of the pick pack ship directly in the ERP if they're used to doing it in a mobile handset. It might be worth if you're already on a WMS, that's a phase one item because it doesn't disrupt

Nirav Shah (32:24)
Yeah.

Peter Nicholson (32:25)
the business workflow that they're used to.

Emily Browning (32:27)
I think EDI you can you can look at in the same way. If you've already got it, you've got to keep it. But because of because what I've actually personally never done an EDI implementation, but I've never heard of one going that smoothly. So you I wouldn't want to then add it into phase one if we don't already have it, because you have that customer relationship on the line if you're implementing EDI with them. You don't want that to line up with a go live that potentially gets pushed.

Fingers crossed it doesn't get pushed, but often with an ERP migration it does. So that one, that one is kind of almost where you you have to do it if if you already use it with your customers or cer certain customers, or you should wait.

Nirav Shah (33:11)
Yeah, and like that customer experience you don't want to bother with. I think that's a great point, Emily. if it's customer experience oriented, that should be phase one. There is no question about that. and we have to keep customers happy, we have to keep shipments going out the door, we have to keep invoicing, get cash in, right? All that stuff is is is critical, mission critical for phase one to be able to do efficiently and easily in the phase one project.

Emily Browning (33:34)
You mentioned

Peter Nicholson (33:34)
I think you simply

won't I was gonna say

Emily Browning (33:36)
Then you

Peter Nicholson (33:37)
sometimes you just you simply won't be able to cope without having it. If you've got a a customer

Nirav Shah (33:40)
Mm-hmm. Right.

Peter Nicholson (33:42)
that's on an EDI setup with you and they're giving you a thousand orders a day, you can't do that. Day one of go live. You just haven't got the capacity

Emily Browning (33:49)
Mm-hmm.

Nirav Shah (33:49)
Exactly.

Peter Nicholson (33:50)
to put those in the system. Has to be in place

Nirav Shah (33:52)
Right.

Peter Nicholson (33:52)
beforehand.

Nirav Shah (33:54)
Yeah. Yeah. I agree.

Emily Browning (33:56)
you mentioned about the the VAR, the implementation partner, and that sort of looking at phase two and what it should look like. It's also really key for phase one going well, right? We spoke at the beginning about scope creep. If you have an implementation partner that isn't going to think about phase two and every little thing that you or your key users or anyone else asks for, and I have seen this or I've heard of it, I've not

personally been involved in it. But if your implementation partner just says, yep, yep, yep, then yeah, phase one will never end. so that's I that's

Nirav Shah (34:26)
Mm-hmm.

Emily Browning (34:27)
a really key part to it as well. Because even if even if you're managing the project really well, you aren't necessarily there for every conversation that your users, your key users, your work stream owners, your subject matter experts, whatever, them speaking to your implementation partner.

So you have to be able to trust

Nirav Shah (34:44)
Mm-hmm.

Emily Browning (34:44)
that implementation partner to have that conversation without you there to oversee it as well. So you have to be so discerning when you when you select a partner, it's it's make or break

Nirav Shah (34:54)
You do.

Emily Browning (34:54)
for your budget and your timeline. It's it's it's so important. And I don't think that's always appreciated.

Nirav Shah (35:03)
Mm-hmm. Mm hmm. You're absol absolutely right.

Peter Nicholson (35:07)
One other reason why I wouldn't touch a phase two item. Well, say I think there's some categories of phase two stuff, but the stuff that's around automation and optimization of daily admin tasks is a quick, easy win that can lift the burden

Nirav Shah (35:21)
Mm-hmm.

Peter Nicholson (35:21)
from teams. I will not touch if

Nirav Shah (35:23)
Mm-hmm.

Peter Nicholson (35:24)
I do not feel that that team

know how to operate the ERP fully and are engaged and want to have automations in the first place. I

Nirav Shah (35:36)
Mm-hmm.

Peter Nicholson (35:37)
think I I've said it multiple times. I i I liken it to flying an aircraft, right? There's a reason why, you know, commercial airliners almost the entire flight duration is on autopilot.

They take off, then manually fly it to around 2,000 feet, goes on autopilot. All the way until literally 500 feet above the landing runway. It gets turned off and they manually land it. The rest of the time is on autopilot. However, they only do that because the pilot has had hundreds of hours of training of how to manually fly the plane. Right?

Nirav Shah (36:07)
Yeah.

Peter Nicholson (36:09)
So when that autopilot fail fails.

something just doesn't quite look quite right, they know what's happened, why it's happened, and how to correct it. And I think it's the

Nirav Shah (36:19)
yeah.

Peter Nicholson (36:20)
same when we go to ERP automations as well. The team

Nirav Shah (36:23)
Mm-hmm.

Peter Nicholson (36:24)
have to know exactly what happens, what they do, why they do it, what happens in the background

Nirav Shah (36:30)
Yeah.

Peter Nicholson (36:31)
when they do that, and be able to spot when it's gone wrong. When they

Nirav Shah (36:34)
Mm-hmm.

Peter Nicholson (36:35)
competent enough to do that, that's when you can start turning on automations because they can catch, you know, the exceptions that caused the automation to either fail completely or partially fail. So for example, we talk about AR invoicing, for example. That's a nice quick, easy win. Every evening, any shipments that have been confirmed by the warehouse automatically generate invoices and email out to customers.

Nirav Shah (37:01)
Mm-hmm.

Peter Nicholson (37:02)
That's a nice easy win that gets rid of a load of drudgery. but

Nirav Shah (37:04)
Yeah. Yeah.

Peter Nicholson (37:06)
it needs that AR team to spot when that hasn't happened and be able to find out where it broke and what and why it went wrong to be able to fix it.

Nirav Shah (37:15)
Mm-hmm.

Peter Nicholson (37:16)
A team that don't know what's going on, you've just got a bad process not managed very well, to a alien process that now they don't stand a chance. That's very dangerous.

Nirav Shah (37:27)
Yeah.

Yeah.

Emily Browning (37:29)
Mm-hmm.

Very common problem to have and hard to

Nirav Shah (37:33)
Mm-hmm.

Emily Browning (37:33)
overcome.

Peter Nicholson (37:34)
Well I would

Nirav Shah (37:35)
Yeah.

Peter Nicholson (37:35)
hope I would hope that the team almost start to get jealous seeing another department or envious of another department

Nirav Shah (37:42)
Mm-hmm.

Peter Nicholson (37:43)
that seem to be getting all of these automations and they're all celebrating. I think of the

Nirav Shah (37:47)
Right.

Peter Nicholson (37:47)
the SpongeBob meme with Squidward like looking

Emily Browning (37:47)
Yeah, but but it's but it's all IT's fault.

Peter Nicholson (37:49)
outside.

Emily Browning (37:50)
Yes, I know the one you mean. When he's looking at SpongeBob

Peter Nicholson (37:50)
It's you could have this. Yeah.

Emily Browning (37:53)
and Patrick having fun outside. Yeah. Yeah, but they think they think IT

Peter Nicholson (37:55)
Yeah, and Squidwards like yeah, looking at yeah. Yeah. It's it's that. I you know guys, you could have this. You're only stopping yourself.

Nirav Shah (37:58)
Ha ha ha.

Emily Browning (38:02)
have nailed the door shut so they're not allowed outside to play with with

Nirav Shah (38:04)
Mm-hmm. Mm-hmm.

Emily Browning (38:06)
SpongeBob and Patrick. Sometimes. So it's tough.

Nirav Shah (38:08)
That's it.

Emily Browning (38:11)
I I think that's a really hard one to manage. And to manage that, I guess if you if you're if you're managing a project and you kind of spot this as a problem, you've got to involve those business stakeholders in look, we've identified this risk. It's sort of a risk to the success after go live, I guess, like using using the system well, the you know, overall user, user acceptance, user feeling after we go live. You've got to involve

The business and sort of escalate that issue that you see brewing. And you will see it brewing because they won't be so well engaged with testing and training and things like that. You know who those people are who are not really going to understand things when you go live. It is going to happen, I think. I've I've never seen a project where every single person was amazing. so you can definitely spot it a mile off and at least.

Be prepared, try to work with the business, their their leads, to do what you need to do. You usually people are smart. so you can you can plan maybe what you were doing so far doesn't work for that person. So you could change maybe you need to change tact with them, because for some reason what you're doing is not is not clicking with them. It can be hard. Sometimes it's impossible, but at least it's something you can spot and

get some support with and try to do something different.

Nirav Shah (39:34)
Yeah, I you know, I'll I'll say on the phase two aspect, it's probably easier to manage a phase two budget than it is a phase one budget. you know, so if there's those a lot of that variability, not knowing right, the unknown, to take on too much into phase one that could really blow up the budget versus going live with phase one.

Now you know what you want to do and you know maybe some more better costs of of turning on a module and the effort it's gonna take to to get it done. I think I think you could manage those costs on a from a phase two perspective better than than you know kind of managing it just by what you think something something will be. So, you know, if there's that kind of risky

module that you're implementing, a risky process you're implementing, maybe hold off for phase two because you know, you'll be able to quantify it a little better from a phase two perspective than phase one.

Peter Nicholson (40:27)
That's a key advantage I think of phase two in general. Phase one, you have to do all of it. You can't go, well this is tough. Let's just let's just concentrate on the most important bit, finance. Like you have to implement the whole ERP, the whole connected system. If you're a manufacturer, you have to do all of the finance, all of the warehousing, all of the BOM management

Nirav Shah (40:47)
Yeah.

Peter Nicholson (40:48)
and factory production cycles. You have to do the whole lot.

Whereas phase two, at least here you've gotten a chance. You might have a huge backlog of this running list of stuff that you didn't want to argue about in phase one. If you're looking at that list and you're auditing it and you have got like 10 things that you said that you'd do in phase two, you have an opportunity here, just pick one. Just pick the one that you think is gonna have the biggest impact to the business and run it all the way through to success. And then you can say, at least we did this and it's had a great impact.

You don't get that opportunity in phase one because everything has to be done. Phase two,

Nirav Shah (41:25)
Yeah.

Peter Nicholson (41:26)
you get to cherry pick and find the biggest bang for your buck.

Emily Browning (41:30)
Mm-hmm. You can

Nirav Shah (41:31)
Yep. Yep.

Emily Browning (41:32)
probably also stop calling it phase two at that point. If it becomes sort of some clearly defined additional projects, then I would also try to get rid of the language of phase two, because you've also you've built up this expectation of phase two. Now, if that's the language you were using, let's put that in phase two, let's put that in phase two. and then you decide to, you know, just do this one part of it great, because you probably picked this great.

value added, high impacting project, but then don't call it phase two, call it whatever it is, and you know, brand it that way to the business because again, then you're managing their expectations really well. And they don't think you're going to be in another, you know, big, dragged out project, which could happen if you sort of maintain a big backlog of stuff that you may or may not get round to when, you know, that has the title phase two.

Nirav Shah (42:23)
Right. Yeah. And I think ERP projects are constantly, you know, evolving.

Emily Browning (42:30)
Mm-hmm.

Nirav Shah (42:31)
I think you have to always look at your ERP and say, How can we do better? What can we do better at the end of the day? your businesses businesses are changing, right? They're getting better equipment, getting better people, they're expanding to different markets. you know, things are happening in business that if you don't take advantage of the ERP and keep questioning

Or or or get the full like really rinse it out, get every drop of it that you can into your business to to help you. I think you're you're you know, you're you're not looking at it the right way. you know, the ERP project is not a set it and forget it. It's really set it and how do we rinse the really rinse it, get so we can make better decisions and make more money. All right, improve the bottom line for the business.

Emily Browning (43:16)
I think on that

same train of thought, you could also maybe you park it for a bit longer. You know, we've we've really improved things just

Nirav Shah (43:23)
Yeah.

Emily Browning (43:23)
by moving to this modern ERP. Now we want to look at growing the business. Maybe we need to look at our CRM. Maybe maybe it's something

Nirav Shah (43:30)
Mm-hmm.

Emily Browning (43:31)
different we need to do now. And now we've got a bit more capacity to do it because we've simplified things just by moving into this modern ERP and doing phase one really well.

Nirav Shah (43:41)
Exactly.

Peter Nicholson (43:43)
This is where an ERP and the idea of an evolving ERP, this is where it's really transformative for a business because beforehand, if you were to open up a new end user market that now floods the business with extra revenue and therefore extra admin of order processing and shipping, etc. etc. The old way on your old ERP was, crap, we need to build a bigger team. We had need more customer service people. We need another warehouse person.

That was the old way of thinking. Now with the modern ERP and these kind of projects after after phase one, now you can start to say, Well, hang on, how about this smaller market that's low revenue, low profitability? Now we have a chance to build an e commerce site and have a sh ha and have that Shopify connector.

and push them to a to a portal and they can place their orders there and then you can start to talk about 3PL. Go, you know, w we'll dump a load of like e-commerce web shop product to a third party logistics company. Get that out because now now we have this ability to grow into this focused market that's more attractive because it's you know improving the bottom line, has more revenue, et cetera, et cetera.

It's a very different way of thinking and I think that's led or driven by the ERP being transformative, a modern ERP being transformative. So it kinda links to your point there about the about the CRM.

it could be, we can just buy the CRM module. You know, it might not be we need to go and buy Salesforce. It could be does our ERP have a module that's CRM that's fit for us? We might not need this huge sales force. If you do, for example, find that you actually could benefit and salesforce is the right thing.

Guess what? There's connectivity between Salesforce and a modern modern ERP anyway. So yeah, that's an interesting point. And it it might be now those items that were put on that parking lot get pushed down because now you've got this ability to to use other tooling or there's other initiatives that would help or be more impactful to growth.

Anything else? I think that was a really good chat about phase two.

Emily Browning (45:52)
I'm I'm happy.

Nirav Shah (45:53)
That was yeah. Yeah. No, I thought it was that was I mean we could probably talk about phase two the whole day. There's there's, you know, a lot of different moving pieces to it. when it when you boil it down, whether do it or not do it, what to look for is just look at your business, right? Do you feel like there's still a gap after

what you've already received from the ERP project. Do you do you see there's a blind spot? Are people still upset about something? You know, when you boil it down to that, that to me is a business ERP opportunity to, you know, get that right and and and put better things in place to fill those gaps, blind spots and, you know,

employees that might not be super satisfied with with with the phase one side of things, which is okay. We're not gonna make everybody happy like we said, but that's kind of for me, that's what it boils down to as a partner.

Peter Nicholson (46:50)
Very good. with that, I think we can close. so anyone that's listening, I hope you enjoyed our informal chat around phase two slash parking lot slash

long item list that we didn't want to argue about during phase one. or if you've listened to this and you've actually delivered a phase two or even just a phase two item, we would like to hear how you went around that. Is there anything that we missed today? because between the three of us we can speak to our experiences but we always

Nirav Shah (47:18)
Mm-hmm.

Peter Nicholson (47:19)
want to to hear from others that might have had a really awesome phase two initiative that has taken their ERP

Nirav Shah (47:25)
Yep.

Peter Nicholson (47:25)
the next level so always

Nirav Shah (47:26)
Yep.

Peter Nicholson (47:27)
reach out to us we post everything on on LinkedIn so you can find us on there search our names or even search for the ABCs of ERP and beyond we also post this to YouTube as well new episodes come out every two weeks so stay tuned like smash the subscribe button and all of that

Nirav Shah (47:43)
Yeah.

Peter Nicholson (47:44)
and with that said thank you both and I'll catch you on the next episode

Emily Browning (47:50)
Thank you.

Nirav Shah (47:50)
Thank you.

Emily Browning (47:51)
See you next time.