The low cost and easy accessibility associated with open source applications make them very attractive to some...
companies. But, as yoga and exercise products manufacturer Hugger-Mugger discovered, love at first sight led to a hastily implemented and ultimately botched implementation of Compiere's open source ERP.
The Salt Lake City-based Hugger-Mugger, a 23-year-old firm that chalks up annual revenues of about $5 million, quickly learned that too much, too soon can be as damaging in ERP deployments as too little, too late, according to company president Tom Chamberlain.
Until the ERP suite implementation, Hugger-Mugger's sales vehicles and fulfillment centers were supported by various point solutions, including order entry, accounting and inventory management. For example, accounting and documentation were done on Peachtree Software (now owned by Sage Software), order entry and data management on NetSuite Inc. software, and warehouse fulfillment and management on Dydacomp's Mail Order Manager (M.O.M.).
The point solutions didn't communicate well with each other, and some of them didn't perform well for Hugger-Mugger.
"M.O.M. did a poor job of handling warehouse and inventory processes," said Chamberlain. "NetSuite didn't handle the back end well."
It was clear to Hugger-Mugger's staff that the firm needed to implement a comprehensive ERP suite. They ultimately decided to go with Compiere ERP on Linux with Oracle Database 10g on the back end.
"If you get ERP right, you'll be able to manage your business more efficiently," Chamberlain said. "Besides the low buy-in cost, Compiere on Linux and Oracle works. In particular, Compiere's customer order entry, shipping module, Web entry and other apps work well."
Unfortunately, a series of bad decisions followed.
"[The IT staff] didn't do any pre-work. They just installed Compiere," said Chamberlain, who wasn't with the company at the time. "They didn't understand that ERP is very complicated, and moving from point solutions to an integrated suite requires a whole different way of looking at the business. Most people take about a year of preparation."
The IT staff only did a small amount of testing and did not do that testing with Hugger-Mugger's data and processes, according to Chamberlain. Instead, early this year, they just put Compiere into production fairly quickly. Chamberlain, still stunned by this approach, said: "You don't go live and say, 'Gee, how does this work?'"
The only user training given was a short speech.
"Operators didn't have a clue how to use the new system," Chamberlain said.
In fact, the way Compiere was set up – incorrectly, that is – made all the processes more complicated than they had been before. The IT people set it up from an IT perspective, one in which some processes are intuitive to an IT expert and clicking from screen to screen isn't considered a chore, according to Chamberlain. So, call center reps had to click through eight screens to enter an order, making a process that should take only a couple of minutes take five-to-10 times longer.
Many data entry and data routing mistakes occurred due to lack of training, the result of a failure to create needed reports and other oversights in implementing Compiere.
"In Compiere, data moves from place to place well," Chamberlain said. "If you have bad data, however, the bad data moves through the system, and you end up with orders or customer info that don't make any sense." In failing to set up certain reports, the IT staff didn't provide mechanisms for finding errors.
Chamberlain came on board as president a few months ago, surveyed the situation and decided to start a major overhaul.
KnowlegeBlue, a local consulting firm and Compiere partner, was called in. KnowledgeBlue set about creating the structured methodologies needed in any ERP deployment, said Robert Kunz, president. Some of the tasks performed included:
- Designing and developing a custom integration with FedEx to by sending the shipping name and address details over to the FedEx system to auto-print the shipping labels from Compiere;
- Integrating receiving the tracking number from FedEx and storing that in Compiere automatically, in order to reduce the double keying of information into two systems;
- Customizing many of the screens in Compiere, reducing the total numbers of fields and tabs by 55% to provide a cleaner look and quicker data entry capabilities;
- Creating a security model in Compiere;
- In the security model, establishing the best practices for defining roles in their systems (wherein, for example, the CFO is sees certain financial data; a warehouse manager only sees shipments, etc.);
- Providing business process training to select users on the customer service, financial and fulfillment staff; and,
- Integrating applications, such as the external Web site, with the functionality in the back-end Compiere ERP.
In addition to bringing in consultants, Chamberlain has dedicated two full-time IT reps to the project for the past six months. About five managers and users from various departments have worked a couple of hours each day reviewing changes made to the system.
"Most people take about a year to prepare for ERP. We're spending that time after the fact," Chamberlain said.
Compiere isn't fully functional yet at Hugger-Mugger, but some parts of it are working well and showing just what a good ERP system can do.
"A customer can place an order in the afternoon of one day, and it will be on the dock to ship at nine a.m. the next morning," Chamberlain said.
Still on the fix-it list are financial statements and data clean-up. The ERP system should be 95% functional by summer's end, Chamberlain said. "Then, we'll go back and see if what we have matches what we want."
If changes are needed, they'll be no sweat, Chamberlain said. Through the revamping, he's seen that Compiere's open source roots and built-in flexibility have eased the pain of the botched implementation.
"With Compiere, if you want to change something you can just do it," Chamberlain said. "With SAP or Baan, you'd have to go to them to make changes. We couldn't afford to pay for that. With Compiere, customizing ERP is affordable for a small company."