I just moved to a new house. There are few things more painful than a house move. You pack all your stuff in boxes, pay movers or bribe friends, uproot your regular routines, give your dog anxiety attacks, and live out of boxes for weeks or months after the move. On average, home owners move every five to seven years. Why do we do this and why do we do it so often?
There are many reasons. Most often that growing family is to blame. The starter house was perfect when it was just the two of us but now, with the kids and all they come with, we just need more room. We’re moving!
Next reason - it’s the granite dammit! Betty and Bif’s kitchen is oh-so-nice and ours is oh-so-not. We could renovate and eat dust or simply move to that new house with the nice shiny countertops. Let’s move!
Changing family circumstances also drive house moves. Junior is now married and has his own juniors and wouldn’t it be great if they could live in the basement and take care of us in our old age? Gotta get a bigger house for that. Call the realtor!
Now think how much better it would be if we could avoid the hassle of all these moves! We liked our neighbourhood and had our comfortable routines in the old place. If only we could change the characteristics of the house without having to change houses or undertake messy renovations. If only we had extra “capacity” locked away at the beginning that we could have opened up when we needed it. We can only dream!
Yes, there are very few things more painful than a house move but I can think of one – converting from one ERP system to another. Mining companies who go through this pay big money, change business processes, make everyone work overtime, and exert effort that could have been spent in more productive ways.
Yet, just as families move houses, it seems that mining companies convert their ERP systems every five to seven years. Why in the world would they do this? The answer is really quite simple. Just like families, mining companies go through distinct phases in their lifecycle. Each phase - from Exploration to Production - presents different challenges.
Many mining companies buy entry level accounting software in the Exploration Phase. They don’t need project costing, asset management software, payroll and HR software during Exploration so why buy that functionality now? Then they move to the Assessment Phase and guess what? Life is more complicated and the entry level stuff doesn’t cut it anymore. Just as the starter house doesn’t work for the growing family, the starter ERP can’t handle the demands of the growing firm. We’d better upgrade!
Also similar to the family who wants a nicer house, believe it or not, there’s a component of cool associated with more sophisticated software. How uncool is it to use entry level software now that the operation is a huge success and getting into the Development Phase? Let’s upgrade!!
Family circumstances change and drive residential moves and mining company circumstances change and drive ERP conversions. However there is a critical difference to consider. While we can only dream about the configurable house described above, mining companies can implement configurable ERP software at the Exploration Phase. They can then avoid disruptive and expensive conversions by simply adding functionality, user licenses, and modules when they grow.
Many of our clients have added a small number of users of advanced ERP software while in the Exploration Phase. They have activated and configured only the basic functionality at that time – usually General Ledger and Accounts Payable processing. When they moved to Assessment and needed Project Costing to track the drilling activity, they simply configured that module – a module they already own.
Similar matches between requirements and functionality can occur at each phase. The Development phase introduces significant capital assets so add the Asset Accounting and Maintenance modules. For those mining companies lucky enough to reach Production, advanced analysis is required and the BI module of the ERP system can be added to deliver that.
A mining company who avoids the trap of entry level software can transition smoothly through the different phases of the mining lifecycle - all without a single ERP conversion. With all that money saved, the CEO can finally move to the granite-loaded, double-kitchen, multi-room mansion of a house that the spouse has been dreaming about!
By Paul Caron, Director of Services, Caron Business Solutions, Trusted Provider of Sage ERP and CRM Solutions in British Columbia