Sunday, 24 October 2010

Irritation with invoices

It's been real busy the last few weeks - we've had some issues with invoicing. But to really understand the problems, and to put it in context, I need to go back to the early days.

When we were starting out, almost everyone seemed to either know someone or had talked to someone that had a story about SAP and invoicing. I got talking to a copier salesman who told me that his company had implemented SAP and were unable to invoice anyone for about 9 months after their go live. From what he said, it seemed the business almost went bust - and they were a multi billion dollar outfit. This did cause some concerns, and so we wanted to make sure that this sort of thing wouldn't happen to us.

Right back at the beginning, we gave the system integrators a copy of the paperwork we needed to generate - I'm not sure, but I think it was within the first two weeks. This included the invoice and we made it very clear what actual information needed to be on it. We weren't too bothered about the specific layout, orientation, fonts etc. but the right text was vital. This had been developed over many years, and much of it was as a result of various problems with customers.

We had got thru the initial planning stages and were starting to work on the config and data. At one of the sessions, someone from finance asked about the documents (invoice, sales forms, shipping forms etc.) - the consultants' project manager told us that someone would be working on these. Now we had been told that we would go live on a date 9 months after the initial launch - when we got to month 6, and there was still no sign of the documents, the question was raised yet again.

At that point, a director from the system integrator firm got involved and he basically tried to tell us that we would be using the standard SAP forms as that was all we required. You can imagine that there were some fairly strong discussions about this - it had been highlighted that we needed the specific text and we weren't prepared to move on that. Eventually, he gave in and arranged for a specialist to come to site to work on the revised documents.

Now I had previously worked on another ERP product and had produced numerous standard forms pretty quickly - generally, once you know what is wanted, it takes maybe a day to get the right data output, and then maybe a few tweaks to get the formatting right. I expected that SAP might be a bit more work, but as a basic design already existed, I thought it was just going to be a matter of making the relevant changes to ensure that we had the right logo, the right addresses and text statements.

The specialist turned up on site and started on this a couple of days a week. About 3 weeks later, we were given what the consultant said was our invoice - and forgive me for saying this, but it was a bunch of crap. It was missing two whole sections of text, it showed the wrong address for the company, none of the text boxes lined up and when it printed, part of the page was missing and our company logo was squashed up so that it looked wrong. The CEO wrote all over the printout in red pen to highlight the areas to fix, then gave it back to the consultant. She worked on it again for another 2 weeks and sent a copy to us. The CEO hit the roof as it looked like nothing had changed at all.

This went on for another couple of months with the consultant turning up on site every few weeks and supposedly working on it from home in between. But after about 4 months, not one of the forms that we needed was actually complete. This lead to more discussions - as we had already decided to delay the go-live, we could live with it, but at that stage were only moving the go-live by a month or two at a time, so it was really important to get the forms completed.

After more complaints, another consultant started to work on it. A couple of months later, we had some of the sales documents, and some for the shipping, but the invoice was still missing. In the end, we finally got the version that we went live with about 2 months before the go live date - about a year after we should have gone live. The invoice form still wasn't exactly right, but we could live with the slight inconsistencies in alignment as long as the text was OK.

As it happens, after go live, we then hit a snag. A process had been set-up so that the invoice would be automatically generated once all of the parts for an order had been shipped. There were a couple of exceptions - we have a couple of big customers that buy regularly, and we are able to invoice for goods shipped as part of orders, even if the whole order has not been completed. The week after go live was OK, but the invoice run after that was not.

As it happens, we quickly found that this was actually down to us - there was a procedural problem, and stuff was not getting marked up properly. As a result, we had some orders going out that should have been invoiced, but weren't - and this lead to a number of other items that were then being blocked. As it happens, altho this lead to a bit of a panic, we did get it fixed real quick and the invoices started going out again. In fact, this an area where we definitely had not had the kind of issues that so many other projects seem to have had.

But a couple of weeks ago, we had a real serious issue. The invoices are printed off on a big high speed printer in the finance office. The print run generally takes about 15-20 minutes each day for those that are not transmitted electronically (and there is an increasing amount of those). One of the staff in accounts noticed that the print run hadn't occurred - after checking, one of my staff realised the printer was not working at all.

Well no problem - just re-direct the print job to a different printer. After all we do this all the time without any issues with all the other forms. But it appeared that we couldn't do that with the invoices - every attempt, the print job was being sent to the faulty printer. Eventually we realised that for some reason, the printer selected was actually hard coded into the form and couldn't be changed on the fly unlike all the others. Now why this is the case, I have no idea - it is just the way that it has been setup.

As it happens, we have got around the problem. We have another machine of the same make and model. We've changed the settings on the print server so that the replacment machine has exactly the same share name and IP address as the faulty one, and we were able to set it up within SAP to replace the faulty machine, so we can now print off the invoices as we should.

It has caused a slight holdup in the billing process - I spent about 5 hours on Friday with one of my staff helping the finance staff get the newly printed invoices put into envelopes ready to be posted. This has helped them catch up, and as everything has gone out in the same month as it should have, we shouldn't get too much of a delay in billing.

But I see this as a major irritation - I can see the need perhaps for labels to have the printer hard coded in them to make sure that they go to the right type of machine. But why an invoice? I really can't see why they should have done that. I also have to say that this was an area that I wanted to try to get a better handle on, but the consultants were simply not interested in passing on any of their precious knowledge and no-one got chance to learn how to work with the forms. I did get a book on it, but it wasn't much help.

I've also tried to get one of my staff booked in on a course to learn about changing forms, but there doesn't seem to be one available until next year. We also have a major problem now in that we have a lot of work coming up, and some of it will be last minute organised (nothing we can do about it - we have to be flexible to fit in with others). It could be that we will simply have to wait - and hope that the printer doesn't break down again.

However, I suppose that now we know the problem exists, we are in a better position. We know how to get around the issue, so we shouldn't get the same delay if it happens again. With luck, the replacement printer will last until we can get someone trained up so that we can get this form fixed more appropriately. With a bit of luck, we will have a couple of quiet weeks to make up for the rather more hectic weeks of the last month!

Sunday, 10 October 2010

Count the cost

A few weeks ago, I highlighted the case of a local government organization which had tried unsuccessfully to implement SAP. As it happens, one of the regular readers of this blog had let me have details of another case in California shortly before that - I have been trying to get some more information on the situation out there, but without much success. In both cases, they have spent a great deal on their implementation without seeing any real benefits - and it looks highly likely that they could cancel their projects having spent millions of public finance for no real value.

About a month ago, I was browsing thru SCN (SAP Community Network). I read an article that I found really interesting (can't remember who by, and can't seem to find it again). The author asked why there were so many stories of poor implementations, and so few stories of successful ones. If I were to be a bit facetious, I might say that it reflects the real situation - but I am actually not sure that is the case. I found the comments made in the item quite interesting, particularly when analyzing the two cases I've highlighted and the situation at the place where I work.

As a general rule, if people are satisfied, they tend not to say very much - they will only make the point publicly if they are extremely pleased. On the other hand, if they are not happy for any reason, they will let you know, often in no uncertain terms! This is just the way that people are - anyone working in customer service will be aware of this. It's usually seen as normal that you will get a lot more letters of complaint than you will of praise - and the complainers will often highlight relatively minor issues, whereas the praisers will normally highlight more major aspects.

One of the common complaints over SAP implementation is that the cost is so high. In our case, we have now spent over $2.5 million with the System Integrators, and it is still climbing. But that doesn't include the internal costs of staff time involved in the project. No exact figures have been kept, but it would seem that most people agree we have spent at least another $1.2 million, probably more, and there is more to come yet.

And we are not finished - we have to roll SAP out to sites overseas, and no-one is prepared to guess what the costs will be, and certainly not what the final tally will reach once they are all done. It also seems likely that once we complete the intial implementation, we could find that we are paying for further development work - it's possible that the project costs will continue to rise over the next couple of decades.

Now there are many that will say we haven't actually spent that much - after all, the implementations at the two organisations highlighted have both been in the 10s of millions of dollars. But they are both much bigger projects, with more people involved so they are bound to be more costly. They have greater revenue streams, so can afford bigger budgets. In our case, the amount committed is many times higher than was originally planned and it has eaten up our annual profits for the last couple of years. It makes it difficult to find cash to pump into other areas of the business that are in need of investment, and this could have a negative impact on our ability to continue to trade.

There are those that say a project involving an ERP implementation cannot just be judged on the same criteria that a smaller project would be assessed against. For example, cost and time overruns are less important than making sure the project does actually get finished and that the product should be judged on many more aspects. I can see the logic in this, and to an extent, I would accept that we do have to take much more of an overview for such a major operation. But equally, no-one should just continue to pour greenbacks into something if there is no indication that the results will justify the expenditure.

In our case, we were assured right back at the beginning, that the costs for the first five years of software, consultancy and support, would be around $1.3 million. Clearly that was a badly underestimated figure and in fact we will probably have spent more than 3 times that much, not including the costs of our own people by the 5 year mark. If that were to result in savings, extra sales or improved margins, then an argument could be made that it was all worthwhile. I would agree that we have seen some efficiencies, but I'm afraid not enough to offset the high cost of the project.

No-one believes that implementing SAP will actually help us sell more - it doesn't make the sales process any easier, and is not going to help us win new business. It may help us improve our margins, but that is more of a long term initiative and won't help us deal with more urgent concerns. I may be wrong, but I suspect that we may never see any return on our investment, even if we take a really long term view of 25 years.

So how do we then assess the value of our implementation? I wish I could answer that. Yes it is working and in that we have clearly been more successful than some others. But has the cost been too high? Only time will tell.