Recently, I had supper with the CFO of a $100+ million dollar manufacturing company and their Sage Channel Partner. Our dinner party represents a partnership of three companies working together since 1999 on various automations to tailor Sage 300 ERP to the exact needs of the manufacturer. The group clearly has been successful together, and all parties benefit greatly by it. The manufacturer wins the most, because of the cumulative enduring value of many properly maintained automations.
Both the Channel Partner and BTerrell Group spend the proceeds of each engagement on operating expenses shortly after receipt. This demonstrates the difference between investment and expense, and both service providers feel like winners, as well.
This successful partnership is built upon the same foundation as all successful relationships: honesty. Nothing happens without an honest business conversation in which all parties openly discuss the issue needing resolution and that issue’s impact on the client.
For instance, many companies struggle with a back-office accounting system and a line of business application that do not share data. Reposting general ledger transactions produced by the line of business application requires time, accuracy, and unnecessary process. Quantifying the impact of these inefficiencies to the company defines the automation opportunity. Usually, a real opportunity exists only if the solution costs the same or is less than the one-year quantified impact of the problem.
If any party postures or withholds information, the project lessens its chance of success. For example, when a client company doesn’t entirely reveal the scope and impact of a problem, the business analysts in charge of scoping a solution cannot appropriately match effort with opportunity. The design focus devolves into an unnecessary search for shortcuts to squeeze the real effort inside a false target. This leaves no room for error. The client, bound by a forced and inaccurate minimization of the problem’s impact, may constantly push the envelope for additional value after the critical design process completes. Every new change order can meet with frustration, second-guessing, and finger pointing. The Channel Partner considers cutting his margin to keep the project going, and finds himself in the uncomfortable position of being both the client advocate and the preserver of a valued supplier relationship. The software developer perpetuates a business relationship built on false pretenses by pricing a solution unprofitably.
All parties can wreck a project by failing to be authentic! Or, all parties can avoid a train wreck by accurately quantifying the impact of a problem in the beginning, scoping a solution that solves that problem, and accurately pricing that scope. Without all parties committing to an honest business conversation, a project sets up so that there are no winners.
To avoid marginal or risky engagements, I like to ask, “What will it mean to your company to solve this problem?” When none of the parties engages in an active conversation to quantify financially the answer to this question, the priority should shift to the development of trust prior to tackling the automation problem. Additionally, the software developer must agree to provide a price delivering fair compensation for the required effort. In this example, I appreciate both the manufacturer and the Channel Partner for giving me 14 years of confidence in these best practices. If you would like to solve a business problem by tailoring Intacct or Sage 300 ERP/Sage CRM, contact me to help you both define the problem and quantify the solution. Once we do that, we’ll know quickly if an opportunity exists to solve the problem through technology.