Opening doors on pay as you go ERP

ThermaTru, formerly Sentinel Doors in Llantrisant, Mid Glamorgan, Wales, which manufactures bespoke fibreglass doors for the public housing market, reports mouth-watering success for an unusual ERP implementation provided as a fixed-fee managed service covering absolutely everything. And that includes scaling to manage growth from an £8m organisation 18 months ago to what is today a £25m revenues business – with all the commensurate increases in order and production volumes, people and admin necessarily entailed. "It was a no brainer," says Huw Edwards, financial director. He's talking about the offer he got from Cardiff-based Wasp, which was for a full Mapics Syteline Microsoft .Net-enabled ERP system, along with new office hardware, the network infrastructure, consultancy, training and support – all of which is ongoing as business needs dictate – provided for a monthly fee of £250 per seat and with no upfront costs. For Edwards the offer was even better. The first year was free and the following six months half price, with a contract period of three years, because the company is in a regional development area for which European grants apply. But he says that, grant or no grant, it's a compelling deal that he would wholeheartedly recommend. "It's been a Godsend," he says. Back in August 2003, ThermaTru found itself with a bunch of disparate, ageing IT that was rapidly being outgrown. "We had everything from different PCs on the desks to a home grown, hard-wired network, functional spreadsheets and off-the-shelf packages that were being stretched beyond their bounds. It had all been cobbled together and we were getting problems resulting in us going down once or twice a week every week. "We needed new hardware, a modern network and a more powerful, integrated system: one that could look after our manufacturing requirements as well as the business as we grew." Edwards came across Wasp and its extraordinary offer and, having looked at conventional suites and offers, went for it. "The alternative systems could have done the job, but we would have needed to fund a considerable investment up-front both on the hardware and software sides, and there was the issue of consultancy, training and support." So late in 2003, Wasp fielded a cross-functional team of consultants and operations people to flesh out the detail, and started the implementation. "In November 2003 they put in a new network and new hardware – new PCs and a new server – over a weekend, as well as all new Microsoft Office applications. That was phase one, and it brought us our number one priority: a reliable system with the right communications to take us forward. Then in February last year, they implemented Syteline ERP, initially to replace our Sage Line 50 accounts system and stock holding package, along with sales order processing and purchasing. Scaleable and visible "Since then, we've been looking at the manufacturing management end, and we're due to go live with that soon. We're working on the MRP planning module, backflushing and bills of materials engines. Those are becoming increasingly important as we grow: you can't manage this size of business with disparate spreadsheets and hope to get materials arriving just in time for production. You have to have better visibility and decision support. Wasp provided the gap analysis, the in-depth consulting, the education and training, and Edwards says it continues to do so as part of the contract. He adds that Wasp also provided the integration for its existing Eden product configurator software. More development will follow: Edwards names two projects on the customer facing side. One will be aimed at providing mobile surveyors with PDAs so that, as they capture sizing and profile information, the data can be downloaded directly to the ERP system to speed up and automate data entry. The other is about making the configurator software available online so that, initially, sales people sitting with customers can do their estimating and quoting in real time. Eventually, that could be extended to major customers ordering direct online. There is also early talk around improving supplier and inbound materials management using barcode systems. It's early days yet, but with this system it can all be done. As Edwards says: "There's no doubt that Syteline was too big a package for us in the beginning, but we chose a system to manage the growth we expect into 2006 and 2007." Would he have used Wasp if the firm hadn't been in Wales and eligible for the grants that make this deal so unbelievably attractive? "I'd be very tempted… For us, and for many others, there would otherwise have to be a considerable investment in improved infrastructure as well as the software – and then there's the intangibles. Do you pay for your consultancy and training up-front with the software provider, or do you do it in house in which case the project becomes more protracted? Either way, there are big direct and indirect costs there. "With Wasp, there's no initial outlay and the ongoing costs are entirely predictable. Also, as your company grows and you need to scale the system and add more seats, there are no surprises. And all additional consulting and training are part of the rental fee." There is another final point that Edwards believes will be the clincher for many. "On the day we went live with the system, everything was running fine until about 11.00am, when the system started to slow down. It seems the link to the Wasp data centre had been under-specified. But the point is that all the right experts were there: within a couple of hours they knew the problem and had a solution. A fix was provided and within 48 hours we had a full solution implemented. "At that point I knew we'd got it right. I've been involved in situations with IT too many times before where there's lots of finger pointing and it can take you well over 48 hours before anyone even admits to fault, never mind a solution." And as if that wasn't enough, he continues: "It's also a partnership deal. If we want to move the business on and need IT to do it, I can talk to them about what we are trying to achieve and they will come back with ideas and options and appropriate IT. We also have no need of an IT department here any more. So there are cost savings there too." Can he make a stab at a cost comparison or an ROI? "Yes: our IT budget before this was about £90,000 and that was for supporting the old mix of systems. When we went live with the new system, we had 32 seats at £250 each per month, so that's much the same, but with all new kit, and all consultancy and training provided. If you then add in the savings in terms of patches provided, software license management covered and all those hidden benefits, it's a no brainer."