Here are a couple of statistics that we used in our decision process. Microsoft Dynamics NAV ERP has 92,000 (2012) installations with 1,600,000 users worldwide. Our other ERP provider, probably the number two midmarket product, has 90,000 US installations scattered across 17 ERP products. Microsoft invested more than $9,000,000,000 (billion) in research and development ($2 billion in ERP, SQL and Office) compared to our other ERP provider’s $2,200,000,000 of revenue worldwide. I am sure that you see the challenge of trying to support and develop 17 ERP products when your competitor spends four times your revenue on research and development. Resources are always limited. No one can support 17 ERP products. And, every consolidator has the same problem. Companies don’t switch to another of your products just because you ask them to do so. When people start considering switching software, they look at all the products, not just those of their current developer.
Finally, we needed a developer who had the financial where-with-all and a limited number of products. We needed a partner who wasn’t in the consolidation game, but was committed to organic growth of ERP revenues. Someone who had the technical resources to maintain not only the accounting and business management elements of the product, but also the insight and ability to continue to improve the capability to interact with other programs and systems. This is one of the things that caused our other vendor to stumble several times.
Think for a moment of all the moving pieces involved in your ERP solution. Of course, we all think about the PC operating system, XP, Windows 7, Windows 8 (32 bit and 64bit) and the server operating system (32b9t and 64bit). But, what about the mobile operating systems and Internet browser compatibility – oh yeah, many of us want to access our ERP from our browser. Then there is the database – SQL 2000, 2005, 2008, 2012 (32bit and 64bit). Next, there is compatibility with Office with all its versions and new releases. How about SharePoint? All we used to care about was, did the ERP software run well in a multi-user environment; but that is no longer the case. We want to have the ability to access our data and share and capture data in multiple ways; from wherever we are.
We spent many hours, days, weeks and months exploring various ERP software developers and products. Some products weren’t right for our distribution and manufacturing clients. Some feature sets were too shallow or too narrow. Some products were behind the technology curve. Some developers didn’t have a plan to advance the product. Some developers had too many products – they couldn’t keep them all current or even keep them viable on a long term basis. Some products were designed well for either modification or reporting. Some products didn’t scale up or didn’t scale down.
Some – well, there are lots of reasons, but the important thing, from our perspective, was that Microsoft Dynamics NAV fit the bill from features, scalability (up or down), modifiability, data structure, technological strength, depth and breadth of support from the developer and from partners who sold NAV and the number of customers using NAV, and most importantly, commitment from Microsoft. Why were these things all important – well, I am sure the answer is apparent. The future of our company and the livelihood of our employees depended on it. Moving from one ERP product to another has serious challenges. First, there is the challenge of learning the software – not just how to use it, but how to help our clients implement the software. Helping them make the right choices between numerous options and setup switches is critical for the success of their business. Then, there is the challenge of marketing and selling a new product – and convincing someone to buy from us, when we have never sold or implemented this software and have no references.
Now, I have supreme confidence in my team, but I also know the challenge I was placing before them. They all have years of experience with one product. Now, they are going to have to learn a new product while supporting the old product. There will be lots of opportunities to mix up the two products and lots of opportunities to want to go back to the old product because it is comfortable and easy. Learning something is never easy. The background of experience and knowledge they used to support and modify the old product was now of little value and they had no experience to support the new product. All of these are challenges that could have derailed our transitional efforts success.
In addition to the stress this would place on my staff, there were other kinds of commitment our business would have to make. First was the money to pay for training, fees, new equipment, travel, testing, books, outside consulting services, and a myriad of other expenses. Additionally, based on our business ethics, we knew that we would not be selling our old product to new customers and wouldn’t be ready to sell the new product for some time, so our revenue stream was going to be challenged. Then, we needed to make changes to our website, begin our marketing effort, and develop new alliances and outside resources. My initial estimates were that the investment would be more than $100,000, perhaps as much as $150,000. In the end, we probably spent and gave up incentives of about $250,000 before getting to the place we are now. Now, we have 15 clients on Microsoft Dynamics NAV and we are so thankful that we have made the transition. It has not been easy and there have been many frustrating moments when I wished I knew NAV like I knew our old product.
I hope that you have found this discussion interesting, but more importantly, I hope that you find it useful as you consider your business’s future, whether you are changing your ERP or your business. While the software business is probably more volatile than your business, I recommend that you make sure that you are at the top of your game, that you don’t rely on the old way of doing things because it is easy and comfortable. Make sure that you are continually evaluating your business and finding ways to improve your product and delivery methods. You, your future and the future of your employees depend on your choices and execution.
If you are interested in finding out if Microsoft Dynamics NAV ERP (I know, that’s a mouthful) is right for you and your company, drop me line (firstname.lastname@example.org) or give me a call at 763-571-8580.