While not uncommon, starting with an MRP system and adding ERP later does present some unique challenges.  I would strongly recommend keeping two things in mind: 1) the eventual integration between MRP and finance; and, 2) the finance needs from the MRP system.  Both are important, and both require financial involvement from the start, even if manufacturing goes off on their own.

Going a little deeper on the first point, it would be wise to review your financial system options related to the manufacturing system now, as well as the available integration with these systems.  Be aware that "integration" may be used to describe anything from moving a few bits of data back and forth by a spreadsheet upload, to a full end-to-end ERP.   I would recommend that you define what you mean by integration in your requirements - for example, is it one version of truth, platform compatibility for consolidated reporting, robust auditable integration points, all of the above, or something else entirely?   You will also want to understand the value of integration for your organization - how important are benefits such audit transparency, information velocity and accuracy, and personnel efficiency, to name a few?  Given the extra work that will be required to make separate systems function in your organization, is the perceived cost benefit trade-off of delaying ERP really worth it?

As for the second point, financial requirements are often ignored when finance and manufacturing functional groups proceed separately with systems.  This is almost always a mistake.  MRP functionality usually includes sales operations support (sales orders, shipments, possibly invoices and credit management, bookings analysis) as well as inventory cost (inventory value change, inventory sub-ledger, margin analysis) and procurement management (payables, purchasing).  A significant amount of your financial input resides with your manufacturing system – a decision made in isolation usually leads to disappointing results.  Best to work together from the start for a unified solution. 

We’ve recently posted a great new customer case study to the Tensoft website that beautifully illustrates the benefits of cloud deployment. Focusing on our customer, Syndiant, the four-page case study describes how this technology industry start-up has been able to leverage Tensoft’s industry-specific solutions in the cloud to quickly gain better visibility, control, and efficiency.  .

 Syndiant’s V.P. of Operations, Tupper Patnode, provided much of the commentary in the document, discussing in detail how Tensoft FSM and Microsoft Dynamics GP, running on a cloud platform provided by Tensoft partner SaaSplaza, enabled the company to comfortably plan and scale their growth from a $1 million company to $20 and up to a $60 million enterprise. Take a look at the Syndiant case study and tell us what you think by responding to this blog.

And, if you’re planning to attend Microsoft Dynamics Convergence in Atlanta on April 10-13, discuss the particulars of the Syndiant project or your own future project with our own Michael Chadwick and Sonam Thandi in the SaaSplaza booth #1316. They will only be at the booth part of the time, so contact me ASAP if you’d like to arrange a time to meet.

See you in the Cloud!

In software development, “retrospective” has a specialized meaning – it’s a post-implementation review, or “post-mortem.”  Over the years, this practice has helped Tensoft continue to improve both our products and implementation services.  In celebration of the ten year anniversary of Tensoft Fabless Semiconductor Management (FSM), a thoughtful retrospective of Tensoft’s work with semiconductor companies seems in order. 

When Tensoft first developed FSM, we became involved with the Global Semiconductor Association (GSA), which was then called the Fabless Semiconductor Association (FSA).  At that time, the GSA sponsored quarterly forums, and Tensoft presented at every Supply Chain and ERP Forum until they were discontinued, and exhibited annually at the association’s tradeshows.  This led to introductions to many of Tensoft’s early customers, and broadened our understanding of the semiconductor industry. 

During what many consider the harshest downturn in the history of the technology industry, Tensoft launched FSM 2.0.  The upside for us was that even $500M fabless semiconductor companies were conserving cash, so FSM’s low total cost of ownership was very attractive.   By 2006, there were enough Tensoft customers to start a quarterly user group, as well as an annual user conference.  These events boosted the collaboration between Tensoft developers and customers to a new level, and solidified the industry best practices that are now built into every Tensoft FSM release and enhancement. 

A true retrospective must take a hard look at “lessons learned,” as well as “hurdles overcome.”   Working with semiconductor companies for a decade taught us that understanding the needs of their operations, customer service, planning, finance and other departments wasn’t enough  - we had to be able to handle and support  the types of organizational change that our semiconductor customers grapple with.   We’ve seen companies go through three CFOs in two years, growth by a factor of ten in a six month period, or drastic reversals of fortune – or business models – as well.  We learned to adapt our support model and sometimes even step in and offer help before the customer was even aware of the need for it.  I think it’s one of our proudest accomplishments that we’ve been able to support customers going through some extraordinary stress during periods of really chaotic change. 

I think that going through this crucible together has formed some remarkable long-term relationships.  The community aspect of this relationship has changed the dynamics of our R&D and market approach, so that taking care of existing customers is the first priority, and bringing in new customers is actually the result of taking care of that first priority.   The level of involvement with some of our customers and their involvement with being part of our product development and with the rest of the user community is the really fun and fulfilling part of Tensoft’s business – we’re a living, breathing part of this dynamic organism, which is people using our software to achieve their business objectives. 

With Tensoft’s FSM User Conference approaching and Microsoft’s User Conference just past, I’ve had user conferences on my mind lately.  These events are rarely money-makers for the vendors and are often inconvenient for the customers, so it’s easy to wonder if all the trouble is worthwhile for anyone.  My experience on both sides has been that it is, but not for the reasons that you might think. 

You might think, for example, that all of the amassed conference content would provide the key benefit to attendees.  However, over the years that Tensoft has been hosting an annual User Conference, we’ve learned that our customers may benefit from the in-depth discussions and presentations that we’ve put together for them, but they’re really more interested in learning how other customers are managing their businesses.  As a result, we’ve shifted to our agenda to accommodate this. 

You might also think that these conferences primarily benefit vendors by giving them a forum to promote additional products.  On the contrary, Tensoft quickly discovered that the group discussions with customers provided a product roadmap for the next year, allowing us to add enhancements that our customers not only wanted, but had discussed with each other and reached some consensus about exactly what would be most useful to the majority of end users, based on industry best practices. 

This process of discovery through discussion with - and among – our customers has proven to be a powerful tool for improving our products and increasing customer satisfaction.  But it should not be confused with giving each customer what they ask for individually.  Early in Tensoft FSM’s development, one of our advisors cautioned us to avoid being overly influenced by any one customer’s needs and wants, which can sometimes simply be a reflection of the way that one company does business, not an  industry best practice.   Good advice, which our User Conference has helped us follow. 

So, why wouldn’t every software company take the time and effort to hold an annual User Conference?  There’s the time and expense involved, of course, but I suspect that most could find some way to overcome that.   The bigger issue to overcome is the one faced by companies who didn’t follow the advice that we were given, or who provide highly customized solutions to their customers – there’s less common ground for discussion among end users, and little hope of delivering enhancements that will benefit the majority.  And, to me, that means the loss of the special alchemy that’s created through discussion, listening and taking action. 

  Maybe it’s force of habit, since I’m so used to starting every implementation project with a “kick-off meeting” where we set expectations and discuss logistics, but it seems important to do something similar here.   So, I’ll share a little about what you can expect to find here and who’ll be involved.

Starting with who’ll be involved, we plan to include a variety of perspectives from Tensoft ‘s team, including myself and Tensoft’s other co-founder, William White, as well as others.  In addition, we plan to include entries from occasional guest bloggers.

As a company, what we do is business systems for tech companies.  Within that specialization, we focus on execution.  Our focus isn’t on helping our customers build a better product or on building a market. Our focus is on how well our customers do as a company and how well we can enable them to track, manage, bill, and get information to make timely, decisive action possible. 

Our perspective for this blog comes from our experience working with hundreds of tech companies.  What works and what doesn’t?  What are best practices for our customers?  What are the challenges they face?  What are the areas of tech execution – like revenue management, supply chain integration, multi-national operations at an early stage, and the nature of the workforce,  for example – that are important as tech companies grow and re-structure?    

It also comes from our experience and evolution as a tech vendor ourselves – starting as a systems integrator and Value Added Re-seller, transitioning to a software product company, and then adding  hosted ERP to our core offerings.   What industry trends influence us, and how do we stay ahead of them?  How do we innovate and continue to improve on our fabless semiconductor software, our revenue management software, and our ERP solutions?

Finally, I’d like to encourage you to comment on the posts here – we want to hear from you.  And while we’d prefer to have open discussions on the topics here, please contact us directly by clicking on our name at the end of the article, if you’d prefer to send a private email.

-          Bob Scarborough, CEO and Co-founder, Tensoft