...our ERP system. It’s in a spreadsheet somewhere, and if you want to go back to some earlier job to check something … well, ‘That was on Bob’s laptop, and Bob is not here anymore.’ ” He says the company is working on incorporating its legacy data.
“We are a lot further along than we were—significantly further along,” Fairgrieve says, adding that he looks at moving to a complete ERP solution as an elusive continuum. Viewpoint does not have a scheduling module, for example, so Shimmick integrates with Primavera.
Equipment Advantage
One of the ERP system’s important contributions is the equipment module, which Shimmick ties to a remote, fleet-management data-collection system from Seattle-based Zonar Systems. Notes Fairgrieve, “It’s helping us more carefully manage our equipment. We’ve got a fairly good size fleet—$20 million or so—and we had a pretty rudimentary way of tracking equipment costs. Now we are in the 21st Century.”
The company has a profit-and-loss analysis for every piece of equipment. “We have dual rate charges: an ownership rate based on time and an hourly rate based on usage. You blend [the rates], and that’s what you charge for equipment,” he says.
He says Shimmick discovered it had been overcharging jobs because it didn’t know what equipment actually cost. “Our equipment division was always profitable, so we knew we were building too much equipment cost into the [estimate] vs. our competitors.”
Cold Turkey
Another Viewpoint user, Gulf Industries, Inc., Mandeville, La., may have come the furthest in a single jump with its implementation. The 30-year-old firm supplies and installs safety products for highways and bridges. According to CFO Monica Hodges, the firm’s sales have grown in the last five years from $35 million to $75 million. It has a complex structure of several companies, each supplying the others. Gulf works in multiple states and regulatory and tax jurisdictions. Until five and a half months ago, it did it all with a 25-year-old, customized but never-updated DOS-based system.
The company’s founding owner, who died two years ago, didn’t like computers, Hodges explains. “He installed them 25 years ago but was not interested in upgrading.” Everything was done manually with little integration. The software was an accounting package that tracked job costs for only direct costs. “You could not burden the job,” she says. “It did not automatically balance job costs. General ledger reconciliation was a nightmare.”
But in one detail, Gulf Industries was ahead of its time. Hodges says it had negotiated with its bank a decade ago to set up a bill-payment system that let it upload accounts-payable data to the bank, which made direct deposits and cut and mailed checks. “You see it with Quicken and with personal banking, but you don’t see it in businesses like ours,” Hodges says. The company’s in-house programmer wrote code to trigger e-mail and fax notifications-of-payment to vendors. “We started 10 years ago,” she says. “We were early.”
Hodges, the subcontractors and suppliers all loved it, but the company could not find an ERP solution that could do the same thing. It also wanted a vendor that could handle Gulf’s web of intercompany sales—and it almost failed in that, too. But at the make-or-break time in negotiations, the representative from Viewpoint found a way.
Gulf Industries went “cold turkey” and implemented the new system without converting and importing its old data. It went live in 14 weeks. “It was a choice of converting everything or just carrying the balance forward with a minimum amount of history and starting out clean,” says Hodges.
The CFO acknowledges how challenging the transition to an ERP solution can be, echoing a widely held sentiment in the industry. As Hodges says, “This year is going to be the hardest year. Then we are going to move forward.”
