IT & ERP Consulting: Industry Trends

IT/ERP/MRP consulting industry is currently under the transformation.  This process is usually happening and comes in parallel with new economic recovery and change in the business paradigm.  Well try to appeal to historical excurse and give some hints on the future trends.  In our case we work with such products as Microsoft Business Solutions Great Plains, CRM, Navision, Retail Management System (RMS) and cross integrations between them and non-Microsoft products: Oracle, Lotus Notes Domino, Unix & Java platforms: J2EE, EJB, Bea Weblogic, Websphere, etc.

IT/ERP/MRP consulting industry is currently under the transformation.  This process is usually happening and comes in parallel with new economic recovery and change in the business paradigm.  Well try to appeal to historical excurse and give some hints on the future trends.  In our case we work with such products as Microsoft Business Solutions Great Plains, CRM, Navision, Retail Management System (RMS) and cross integrations between them and non-Microsoft products: Oracle, Lotus Notes Domino, Unix & Java platforms: J2EE, EJB, Bea Weblogic, Websphere, etc.  Lets look at the history and the current processes:

• Classical Business Consulting.  It was flourishing back in 1950^th and had two major schools or directions.  It was the time when large businesses were trying to deal with the dilemma of growth and efficiency of internal document workflow.  If you remember in that time computers didnt exist and everything was recorded on the paper.  Plus it was the need to probe and deploy psychological methods of coordinating headquarters personnel: sales, purchasing, finance and accounting departments to work in synch with one another under the condition of paper document workflow
• ERP System of 1960^th.  This was the time of mainframe and first ERP.  If you look at the ERP application, it has GL, AP, AR modules these are classical and could be tracked back to the 19^th century.  When you automate Sales Order Processing or Purchase Order Processing this would be something new and each ERP vendor would be doing it as its own invention.  ERP Systems implementation faced the challenge of user experience lack in those days this is why we see large number of flourishing ERP consulting firms in late 1960^th and 1970^th.
• ERP with rich functionality 1980^th & 1990^th.  Looking back to 1980^th the typical large and midsize corporation had relatively similar business processes in Sales, Purchasing, Inventory Control, Warehouse Management, Logistics, Shipping & Receiving, Manufacturing, Accounting and Finance departments.  When we talk about similarity we are comparing it to the diversification of late 1990^th and 2000^th when a lot of new companies grew up and went public.  The market conditions of 1980^th and early 1990^th made it feasible to design the systems with rich functionality.  From the ERP side we would name: SAP, Oracle, PeopleSoft, JDEdwards.  These systems cost several hundred thousand dollars in software licenses and the implementation of the system requires comparable budget.
• Business Models Diversification 2000^th.  If you look at the dot-com boom of late 1990^th you will see that these companies tried to invent their own way of business processes to automate serving their unique business offer to the potential clientele, usually related to the new opportunities of internet marketing & sales.  In the case of these new public (plus small & micro cap) rapidly growing companies business processes were in the turbulent change and the deployment of the system with rich functionality (usually with long implementation cycle) would not be the option.
• Customization & Integration.  As the alternative new large and midsize businesses have to deploy standard functionality ERP system (not rich functionality ERP) and consider it as a platform for customization, custom development, reporting and integration.  These standard functionality systems are the ERP applications of the middle market: Microsoft Great Plains, Navision, Axapta, Accpac, MAS90, etc.  In our opinion future business paradigm makes it non feasible to purchase high-end ERP system for midsize and even large corporation.
• Andrew Karasev is Chief Technology Officer at Alba Spectrum Technologies ( http://www.albaspectrum.com ) - Microsoft Business Solutions and IBM Lotus Domino Partner, serving corporate customers in the following industries: Aerospace & Defense, Medical & Healthcare, Distribution & Logistics, Wholesale & Retail, Chemicals, Oil & Gas, Placement & Recruiting, Publishing, Textile, Pharmaceutical, Non-Profit, Beverages, Conglomerates, Apparels, Durables, Manufacturing and having locations in multiple states and internationally.

Everything I Ever Needed to Know about the Consulting Business, I Learned in Manufacturing

Like most writers, I have two jobs: consulting work and a "real"
job. I'm not ashamed to say, for a long time, my consulting
business was haphazard, at best. While, I'm a strong writer
and designer, I knew little about running my own business until
recently.

After nearly a decade of working for newspapers and the like, I
started a new life as a marketing executive for a small
manufacturing company. As with most small companies, I found
myself taking on a variety of tasks, including billing, customer
service, inventory and shipping.

The lessons I've learned working for this company, I applied to
my editing and Web design business with great success. Here's
what I've learned:

* You can set your own terms. You can decide if you will be
paid upon receipt, in 15 days or 30 days. Make your terms
clear and print them on your written bid and on your
invoices. It was liberating to know that I no longer had to
wait and keep asking my client when the check would be sent
out. Nor was I held hostage to smaller companies that
considered my invoice a lower priority than their other
bills.

* A credit check can be your best friend. Before a
manufacturer will give a new client it's best terms
(usually Net 30 or Net 45), it will run a credit check.
Think about it, when you tell a client they don't have to
pay you for 30 days, it's the same as offering a line of
credit. But what do us writers do? We run to our message
boards and ask other writers if they have ever worked with
this particular client before. Make a simple form with your
logo and call and check the references yourself. It may
take an hour or two of work, but avoiding one bad credit
risk will save you hours more. (It can save a lot of money,
too!)

* Have someone else call companies that are late with
payments. Manufacturing companies know the person who makes
the sale and handles customer needs should not be the same
person demanding payment. I'm lucky. My husband is a no-
nonsense businessman who has no qualms about calling my
clients and demanding payment. If you aren't so lucky, you
can ask a friend in a similar or complimentary business to
make the calls for you. In exchange, offer to do the same
for your friend's business.

* It's okay to charge for shipping. If you are sending files
or documents via any method other than good, old standard
mail, it's perfectly acceptable to add the cost of
shipping. (I strongly suggest making sure your customers
know that UPS or FedEx is not included in your bid price.)
Not only is it OK to add this charge, but also most
manufacturers add 10% because the manufacturers are
fronting the cost of shipping. That's right, you're paying
for it and expecting to be reimbursed. That has a value.

* Use a packing list. If you are sending a client documents
or a CD containing electronic files, use a packing list.
Don't describe the contents in a cover letter, it will be
thrown away or misplaced. Not only should you use a packing
list, but also it should be in the same format as your
initial written bid and your final invoice to avoid
confusion.

* Don't be afraid of paper. Writers aren't necessarily afraid
of paper, but home business owners are. Manufacturing
companies, especially those that are ISO certified, keep
paper copies of everything. If you get an e-mail from your
client changing the specs of a project, print it out and
file it. You never know when your client might need a
reminder.

* Develop a paperwork system and stick with it. If you
require a client to sign a written agreement outlining his
expectations, require the same from all your clients. If
you need a purchase order number from a client to begin
business, ask the same thing from everyone.
job. I'm not ashamed to say, for a long time, my consulting
business was haphazard, at best. While, I'm a strong writer
and designer, I knew little about running my own business until
recently.

After nearly a decade of working for newspapers and the like, I
started a new life as a marketing executive for a small
manufacturing company. As with most small companies, I found
myself taking on a variety of tasks, including billing, customer
service, inventory and shipping.

The lessons I've learned working for this company, I applied to
my editing and Web design business with great success. Here's
what I've learned:

* You can set your own terms. You can decide if you will be
paid upon receipt, in 15 days or 30 days. Make your terms
clear and print them on your written bid and on your
invoices. It was liberating to know that I no longer had to
wait and keep asking my client when the check would be sent
out. Nor was I held hostage to smaller companies that
considered my invoice a lower priority than their other
bills.

* A credit check can be your best friend. Before a
manufacturer will give a new client it's best terms
(usually Net 30 or Net 45), it will run a credit check.
Think about it, when you tell a client they don't have to
pay you for 30 days, it's the same as offering a line of
credit. But what do us writers do? We run to our message
boards and ask other writers if they have ever worked with
this particular client before. Make a simple form with your
logo and call and check the references yourself. It may
take an hour or two of work, but avoiding one bad credit
risk will save you hours more. (It can save a lot of money,
too!)

* Have someone else call companies that are late with
payments. Manufacturing companies know the person who makes
the sale and handles customer needs should not be the same
person demanding payment. I'm lucky. My husband is a no-
nonsense businessman who has no qualms about calling my
clients and demanding payment. If you aren't so lucky, you
can ask a friend in a similar or complimentary business to
make the calls for you. In exchange, offer to do the same
for your friend's business.

* It's okay to charge for shipping. If you are sending files
or documents via any method other than good, old standard
mail, it's perfectly acceptable to add the cost of
shipping. (I strongly suggest making sure your customers
know that UPS or FedEx is not included in your bid price.)
Not only is it OK to add this charge, but also most
manufacturers add 10% because the manufacturers are
fronting the cost of shipping. That's right, you're paying
for it and expecting to be reimbursed. That has a value.

* Use a packing list. If you are sending a client documents
or a CD containing electronic files, use a packing list.
Don't describe the contents in a cover letter, it will be
thrown away or misplaced. Not only should you use a packing
list, but also it should be in the same format as your
initial written bid and your final invoice to avoid
confusion.

* Don't be afraid of paper. Writers aren't necessarily afraid
of paper, but home business owners are. Manufacturing
companies, especially those that are ISO certified, keep
paper copies of everything. If you get an e-mail from your
client changing the specs of a project, print it out and
file it. You never know when your client might need a
reminder.

* Develop a paperwork system and stick with it. If you
require a client to sign a written agreement outlining his
expectations, require the same from all your clients. If
you need a purchase order number from a client to begin
business, ask the same thing from everyone.

Stacy Strunk is Marketing Manager for Sparks Technology, Inc.,
http://www.sparkstech.com, a filter manufacturing company located
near Chicago, Ill. She also provides freelance writing, editing
and Web design services from http://www.strunkwriter.com.

How To Follow Up A Consulting Proposal

Copyright 2002 by Paul Bednar

After submitting a proposal, many consultants wait a short period
of time--maybe a few days or one week, before contacting the
potential client. The purpose is to find out if the proposal has
been accepted, rejected, or if modifications are necessary.
Contacting the potential client once is professional and
acceptable. However, if your phone call or email is not
returned, you will be tempted to repeatedly contact the potential
client for an answer.

Resist this temptation. Hounding the potential client for an
answer does not improve the situation. Don't take it personally.
After making your one inquiry about the proposal's status, forget
about it and move on. Begin searching for the next potential
client.

This practice of submit-follow up-move on defies conventional
sales methodology where people are trained to continuously follow
up with prospects in order to get sales. However, this method
works for these reasons:

1. You have no idea what has happened at the company and why your
proposal hasn't yet been accepted. Perhaps the entire project
got cancelled? Maybe quarterly earnings were disappointing and a
layoff is now in the works? The possibilities are endless and
constant speculation for an answer can drive you crazy!

2. The potential client knows how to contact you. Once you've
submitted the proposal and followed up, you've done your part.
Let them make the effort to contact you to discuss proposal
changes and clarifications. When they do, it demonstrates their
interest and you are one step closer to being retained.

3. Getting clients is a numbers game. You have to submit a
certain number of proposals just to get retained. By moving on
to search for the next client, you increase the odds that your
next prospect will become a client.

Contacting the potential client more than once to ascertain the
proposal's status is counterproductive. Also, it forces you to
spend time and energy on what is now in the past. Keep your
energies and thoughts focused on identifying the next client.
Besides, when a proposal is finally accepted, you can be amazed
at your good fortune!
Copyright 2002 by Paul Bednar

After submitting a proposal, many consultants wait a short period
of time--maybe a few days or one week, before contacting the
potential client. The purpose is to find out if the proposal has
been accepted, rejected, or if modifications are necessary.
Contacting the potential client once is professional and
acceptable. However, if your phone call or email is not
returned, you will be tempted to repeatedly contact the potential
client for an answer.

Resist this temptation. Hounding the potential client for an
answer does not improve the situation. Don't take it personally.
After making your one inquiry about the proposal's status, forget
about it and move on. Begin searching for the next potential
client.

This practice of submit-follow up-move on defies conventional
sales methodology where people are trained to continuously follow
up with prospects in order to get sales. However, this method
works for these reasons:

1. You have no idea what has happened at the company and why your
proposal hasn't yet been accepted. Perhaps the entire project
got cancelled? Maybe quarterly earnings were disappointing and a
layoff is now in the works? The possibilities are endless and
constant speculation for an answer can drive you crazy!

2. The potential client knows how to contact you. Once you've
submitted the proposal and followed up, you've done your part.
Let them make the effort to contact you to discuss proposal
changes and clarifications. When they do, it demonstrates their
interest and you are one step closer to being retained.

3. Getting clients is a numbers game. You have to submit a
certain number of proposals just to get retained. By moving on
to search for the next client, you increase the odds that your
next prospect will become a client.

Contacting the potential client more than once to ascertain the
proposal's status is counterproductive. Also, it forces you to
spend time and energy on what is now in the past. Keep your
energies and thoughts focused on identifying the next client.
Besides, when a proposal is finally accepted, you can be amazed
at your good fortune!

Paul Bednar helps people cut the corporate chains and become an
independent consultant. Visit his web site for other articles,
answers to common questions, and lessons learned. Subscribe to
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