By Erin Koss,
CPA is an Andersen Business Consulting Alumni (1993-1999), and CEO of
Syte Consulting Group, Inc.
For most manufacturing companies,
the end of summer and the arrival of fall usually marks the start of planning
for the upcoming year. This is always a great opportunity to start thinking
about the investments your company needs to make to stay competitive and grow —
whether that’s buying new software, adding more people, or streamlining
Whatever your plans, it’s natural to
want to cost out some of those concrete investments and get them on the books
as soon as possible. But while that may seem like the most proactive approach,
it can lead to some unintended consequences.
At Syte, we know from decades of
working with family-owned manufacturing companies that large-scale initiatives
can’t be rushed. They require analysis and planning to pave the way for
In this post, I’d like to offer you
some time-tested advice on budget planning for large change initiatives. Read
on to learn how a focus on planning and analysis up front will save you time and
money later — and set you up for long term success.
Business Transformation Is More Than
a Budget Line Item
Budget planning is a good time to
spark a conversation with your leadership team about where the business needs
to go, and what it will take to get there.
That’s why we developed our four-part Business Transformation Framework
to help our clients plan and implement the solutions they need to get to that
next level. It’s a methodology we use to meet you and your business where you
are, and then map out what steps you need to take (and which investments you
need to make) to get to where you want to go.
And when it comes to planning your
budget for some of these bigger ticket items, I think our approach offers a few
A Gradual Approach Makes
I like to think of our Business
Transformation Framework as a “crawl, walk, run” approach. Before you can hit
the ground running with any new solution or organizational initiative, you need
to have the right foundation in place.
In practice, that means taking an
honest look at where you are in terms of business processes and workflows,
human capacity, and technology.
When you take the time to do a thorough business process assessment
— ahead of deciding what you may or may not need to grow the business —
you’re introducing more predictability into the overall plan. Once you have a
handle on how your organization is currently managing its day-to-day operations
and the roles and technologies that keep things going, you’ll be in a much
better position to determine what you need to change, and plan accordingly.
And if you’re already in a position
where you’re comfortable proceeding with solution selection and implementation,
you can use your knowledge of the organization’s current operations to plan a
smooth transition in a way that minimizes disruption.
The bottom line is that taking a
gradual approach to change, with proper planning up front, is easier on your
organization and your budget.
When You Save Time, You Save Money
Another key advantage our clients
get with our Business Transformation methodology is the amount of effort — and
money — it saves on the back end.
In their enthusiasm to embrace new
technologies in pursuit of a growth strategy, many manufacturing organizations
plunge head-first into solution selection — only to run into problems during implementation.
We can usually trace this back to an
incomplete understanding of current workflows and capacities. Implementing a solution
that doesn’t align with the current reality immediately creates friction:
Software has to be customized on the fly to accommodate existing workflows, or
team members are asked to redesign their processes to fit with new software
capabilities (or limitations). Sometimes, neither approach does the trick.
Before long, the project is behind
schedule, and project costs start to rise as this unplanned-for work threatens
to derail the initiative.
Our Business Transformation
Framework is a time-saving approach. By meeting you where you’re at and being
intentional in the planning on how to move forward, we can help eliminate any back-pedaling during
implementation. You’re able to see what’s coming (and what’s likely
to come up) instead of having to double-back to see where you might have missed
something when you hit a roadblock.
Doing your planning up front saves
you time and money in the long term.
Planning Puts the Horse Before the
The old adage that “If you’re
failing to plan, you’re planning to fail” might sound a bit cliché, but when it
comes to large-scale projects that are tied to business growth … well, the shoe
Big-ticket projects represent
significant investments, so planning them into your budget is obviously
critical. But knowing that your organization needs to change and knowing what
needs to change — including how you’ll get there — are very different
things. Without a thorough assessment of where you are now (and any gaps
and bottlenecks you need to address), any estimate of what you’ll need to spend
to get the business to a new level of growth may just be a costly shot in the
Before you allocate funds to new software
or higher headcount, consider building in budget capacity to analyze your
current operations and identify a solution based on your goals and current state.
With solid analysis and planning in place, you’ll be able to safeguard the
capital investments you’re making and know that they’re going to take your
business where you want it to go.
An Investment in Planning Is an Investment
Investing in ERP solutions and
business process optimization is an investment in business transformation. The good
news is that you don’t have to tackle it all at once. Taking a thoughtful,
methodical approach is easier on your organization and your budget.
Are you starting your operations
planning for next year? If you are, don’t earmark a budget for ERP software
just yet — talk to us first and we’ll help you make a plan. You can schedule your complimentary
consultation right here.
Erin Koss, CPA is an Andersen Business Consulting Alumni (1993-1999), and CEO of Syte Consulting Group, Inc. She is known for helping family-owned manufacturing companies scale with vision and integrity. Taking a people-first, process and technology readiness approach, Erin and the team at Syte ensure companies are ready to take on big change initiatives like ERP before diving in headfirst. A native to the Pacific Northwest, she enjoys traveling, being outdoors, hiking, biking, rowing, and supporting local culinary scene. Talk to Erin about preparing your company for sustainable growth.