New From Microsoft (NOT Software!)

There's something new from Microsoft, and it's not software. It's a methodology called Sure Step.

Why am I excited about a methodology? Because Microsoft has recognized that the reasons that projects fail or customers are unhappy with their system rarely have to do with the software. Just Google "why projects fail" (e.g. here, here and here). You typically don't see "the software was missing important features" as the reason. Project management issues usually top the list: lack of planning, scope creep, poor communications, lack of a proven methodology etc. etc.

In the world of medium sized accounting packages that I work in, project management is often viewed by customers as an unnecessary frill. When creating project budgets, I stopped putting in time for project management because it was routinely removed in the price negotiations with the customer. Instead, I built in time to create a project plan as well as for status meetings and progress reports.

The consultants and the software companies only have themselves to blame. During the sales process we minimize the difficulty of implementing new software. We talk about how easy it is, how everything is menu driven and can be accessed with the proverbial one click of the mouse. We minimize the work that needs to be done by the customer: designing their chart of accounts, downloading history from their existing accounting system or putting thought into how they want the reports to look.

Unless customers see themselves as at least a 50% partner in the success of the project, I guarantee you they will not get full use of the system they invested in. I'm not talking about a dramatic failure here. The result will just be that staff will not abandon their tried and true spreadsheets or side systems and embrace the new technology. Microsoft measures everything (just ask any Microsoft employee what getting a yellow or red light means). They measured software success and came up with the mind blowing statistic that 46% of software licenses go unused. This means that only half of the people you thought would use the new system will actually do so.

So, what should customers do? If you do nothing else, insist on a weekly progress meeting throughout the project, so you can be sure that the whole project gets completed, not just the minimum necessary to go live. The meetings should be short and only the senior people on the project need attend. This meeting is not for solving problems, it just brings them to light. The agenda is:

• What was accomplished last week
• What is planned for next week
• Where we are in the project plan (you DO have a project plan, right?)
• New or changed risks faced by the team

Weekly meetings force people to actually DO something or face the embarrassment of having nothing to report. They let you know who is waiting for whom. They inform everyone of the issues faced by others. They allow you to be proactive instead of just reacting to issues.

Also, during the sales process talk to your consultant about how they implement projects. If it's Microsoft software and the words "Sure Step" do not come up in the presentation, ask why. Ask them about what you need to do to ensure the project's success. Ask them how much of your staff's time you should budget for the project. If the answer seems too good to be true, then it probably is.

Software Implementation 101

RSM Richter, a Canadian accounting firm, addressed software implementation in two recent issues of its midsized companies publication, Advantage. They are short, balanced and well worth reading. In Part 1, they do a good job of setting realistic expectations:

Documenting and automating every minute step of every process in a business cannot be put on a fixed, linear implementation schedule. Unforeseen problems will arise, requiring changes to those business processes and/or the software itself. Sometimes these changes can impact the timeline by weeks or months.

While their analysis is based on the larger Enterprise Resource Planning ("ERP") software packages, the principles are the same for any sized accounting implementation.

In Part 2 (not yet published to the web), they make a point that I would like to amplify: one of the responsibilities of the client is to "appoint a dedicated (and qualified) project manager and steering committee".

If I had to isolate one factor that points to the overall success or failure of an accounting implementation, it would be the dedication of a staff member to the project. Too often I have seen the software project just added on top of the staff's normal responsibilities. The result is that the implementation is sacrificed to whatever is most urgent to the staff member at any given time, i.e. work on the new system stops at month end, budget preparation time, quarterly reporting etc.

If the project is going to involve more than one person from the implementation consultant, the consultant typically appoints a project manager. Even then, the client needs to appoint their own project manager, someone who has the time and authority to ensure client staff do their part. From personal experience, I know that as an external consultant I cannot make anyone do anything on the client staff. I have to work through somebody senior who appreciates the value of the project.

Now that you have a realistic view of what is involved in an accounting software implementation, what if you aren't sure whether in fact you need a new system or not? David Kelly, a contributor to the Microsoft Midsize Business Center has some practical points here.

Bottom Line: if you are considering an accounting software implementation, I would recommend you read these ERP 101 newsletters. If you sell accounting software, I would recommend you get your potential clients to read them. It will help set realistic expecations for the project.

Getting to Phase 2

How much of Excel do you use?

• If you spent a little more time designing your key spreadsheets so that all of the calculations were consistent and the data flowed in a logical way, could you produce more effective reports?


• If you learned a little more about graphing or pivot tables, could your presentations be a little more powerful?

Most accountants I know freely admit that they just scratch the surface of what Excel can do.

Now, what about your accounting system?

That's what I mean by Phase 2: the time when you take a hard look at how the system is being used versus what it's capable of. How much of the initial plan got implemented? How much of it was deferred because of time or budget constraints? Back in the heat of dealing with all of the issues of going live on your system you had to make some compromises to get the system up and working. What about taking some time now and revisiting those decisions? Pull out a list of the features that were identified as "nice to have's" and start to think about implementations.

Phase 2 has been a theme in this blog since its inception. This year, I was asked to write about it for CA Magazine, the voice of Canada's Chartered Accountants. You can find the article here. In it I list some Phase 2 project ideas to help you get started.

In this blog, I would like to talk about a key Phase 2 relationship - you and your consultant. Most accounting systems are implemented by consultants. They have the technical training to set up the system, import the history and train the staff. If you have been live on your system for over a year, you should have someone back for a post-audit. They can take a fresh look at how your staff is using the system and suggest:

• Features in your current system that are not being used effectively,


• Features that you have paid for but which have not been implemented,


• Features that you could use but don't currently have,


• Software upgrade timing,


• Procedures that could be streamlined or made more effective, and


• Answers to questions / problems the staff have but have not voiced.

Depending on the size and complexity of your system, a post-audit can be as quick as two days - one for analysis and one for reporting.

BUT

A lot depends on the qualifications and experience of the consultant. If you don't have someone you trust and who knows your business / industry, then your first task should be to find one.

Oh, and if you would like to improve your Excel knowledge, let me recommend Chris Wood (aka Captain Excel).

Self Implementing Software

A few years ago I was at a boat show where there was a little catamaran (one of those fast, two hulled sail boats) with a big sign reading, "Self Righting". Well, I know that when catamarans tip, they tend to go completely upside down. There's no way they will right themselves. So I walked up to the salesman and asked him about the sign. "Simple," he says, "You can right it yourself."

I was reminded of that salesman when I saw the press release by Technology Group International proclaiming Self Implementing Software.

Designed to hedge against project delays, budget overruns, and overall failures, TGI's new Self Implementing Software is an ideal solution for small to mid-market companies.

How did they accomplish this amazing feat? They created project templates, tools for tracking costs and online training resources. While I applaud them for their ingenuity, these are hardly new tools. I also fail to see how this software will tackle the major challenges of software implementation, such as:

1. Designing an effective accounting structure that meets current reporting requirements and allows for future growth,
2. Addressing the inevitable gap between client expectations and what the software actually does, and
   
3. Scheduling the resources so that the implementation is accomplished on top of the accounting staff's other commitments.

It looks like I still might have a job after all.

Setting Goals

How do you work with a volunteer board to develop the Mission, Vision and Values statements for a charity in one day? You engage Fay Booker, that's how.

Last year I was invited to become the Treasurer at Ewart Angus Homes, which runs two Toronto facilities for people with Alzheimer Disease, Ewart Angus Home and Cedarhurst. The homes are based on the work of Dr. John Tooth, who found that while there was no cure for Alzheimer Disease, the dementia could be slowed down significantly if the following principles are followed:

• Residents should live in a house which as far as possible resembles the home they have lived in all their lives.
• Food must be cooked in each house.
• Each resident must have a single bedroom with private bathroom to which he or she may bring personal possessions and memorabilia.
• Residents should be able as far as possible to carry on the routines to which they have been accustomed.
• Each house must have its own secure garden in which the residents may wander safely.
• Each house must have a wet-weather wandering loop as well as provision for garden wandering in good weather.
• The number of residents in each house should be kept as small as economically practicable.

Like many charities, we have significant challenges, such as securing sustainable funding and keeping our volunteers from burning out. We also face the health care risks borne by much larger organizations, such as clinics and hospitals. We decided it was time to take a Saturday and come to grips with where we are going and how we will get there. One of our members recommended Fay.

I have been in visioning exercises run by professional facilitators before. What made this one different was:

1. Fay has current, practical experience in our industry, and
2. She was not afraid to park issues in order to keep the group's focus.

Fay knew the environment in which we operate. She had a firm command of the risks and challenges we face, so she was able to ask pointed questions that went to the heart of our operations.

Other planning sessions I have been in have been bogged down by "wordsmithing", i.e. using the group's time to craft the exact wording. Fay focused on getting the common themes and ideas down on paper, then she had an associate put them together to form a working wording. We were thus able to push forward and leave the fine tuning for another day.

The result was that we actually finished a little early and all took away a plan to convert our good intentions into concrete actions. That reminds me, we have a Board meeting tomorrow and I have things to prepare . . .

Organizing Your Data

When implementing an accounting system, how do you determine how to identify your Vendors, Customers, Employees, Inventory Items, Fixed Assets, etc. etc. etc?

That is a subject that requires some thought. An important question to ask is whether the identifiers need to have any "intelligence" built into them. An example of an intelligent identifier would be using the vendor's main telephone number as the Vendor ID in the accounting system. Another example would be to use a variation of the company's name (e.g. ABCCAN for ABC Canada Inc.) Intelligent identifiers make intuitive sense, but they suffer from a common problem: what if the underlying information changes? You need to plan what to do if the company moves, gets acquired or changes its name. Some systems let you change the identifier retroactively. Others, particularly older systems, do not.

Employees are a special case. Traditionally, many companies used the employee's Social Insurance Number (SIN) as an identifier. SIN's have been ruled as private information under The Personal Information Protection and Electronic Documents Act (PIPEDA), so you cannot use them as identifiers. Even using the last four digits of the SIN has been ruled as private.

But let me put another idea on the table. When I talk to computer developers, they ask why is there ANY intelligence in indentifiers? Modern systems can sort and filter based on any field. You don't have to use a telephone number as a Vendor ID since you can search your vendor file by telephone number at any time. In that case your Vendor ID could be "VE" followed by a five digit serial number that starts at 00001 and goes up. The two character prefix is handy so you can tell at a glance whether it is a Vendor or a Customer (etc.) that you are talking about.

Getting to Phase II

Remember when you first installed your accounting system? Remember how the implementation team wisely left the "nice to haves" out of the project as they wrestled with customization, training and data conversion issues? How many times did you hear, "Let's leave that to Phase II"?

Did Phase II ever happen? If you just answered YES, then congratulations! Many systems never make it that far.

What am I talking about?

• The digital dashboard that was going to show all your key performance indicators automatically, all in one place.
• The customized financial reporting that was going to put the power in the hands of the end users.
• The add-on software tailored to your unique industry.
• The automated integration which your system currently handles manually.
• The cool new software that would make sales analysis a snap.

So what happens?

• Software and data issues chew up the budget for the whole project.
• Delays push the project up to its deadlines.
• The project team goes on to other projects.
  
• People put in so much overtime that they lose their energy.

The result is an accounting system that processes transactions and reports results, but is missing those things that made it so attractive to begin with.

My message to you is: Don't abandon your dream!

Go back to the original plan. Be both cheerleader and slave driver, but get it back on track. This blog is devoted to getting the most out of business systems. Don't settle for less than the best!