Learn more about The Nuts and Bolts of Creating a Culture of Change: Zoedale Discusses Enterprise Technology Adoption, Process Automation, and the IoT.
Carl: Welcome to the Connected Enterprise podcast, where our guests tell us how they stay connected. I'm your host, Carl Lewis, from Vision33, and my guest is Tim Guest from Zoedale, in the United Kingdom. Tim and I have known each other for about a decade – but we didn’t meet face to face until November of last year!
Carl: Tim, you and I are both speakers for the Biz.ONE conference in late October. We'll get to hang out again, as they say. Please tell our listeners about yourself, Zoedale, and your role there.
Tim: Thanks for the introduction, Carl. It makes me feel old that we've known each other for 10 years. I remember the first phone call – I think I was at an SAP TechEd conference and needed advice about growing our user group.
Tim: Before Zoedale, I worked for an SAP Business One reseller partner. I was in technical sales. We would go to SME distribution and manufacturing companies, do requirements gatherings, put together cool demos, and demonstrate how SAP Business One could save them time and money.
Tim: My parents' business was an SME distribution company running an antiquated accounts package with a CRM bolt-on that wasn’t very good. They were 100% paper-based and needed modernization, so I sold them SAP. It was one of the hardest sales I've done. Negotiating with my dad on the price of SAP licenses and the time it would take to install was tough.
Tim: I joined as a project manager. I was the link between the reseller partner and Zoedale to make sure we realized the benefits and the project ran smoothly. I got involved in the data migration, which was a real eyeopener. Anyone who's used the SAP data transfer workbench will know what I mean. It's very effective, but you have to know how to treat it. Otherwise, you get weird error messages.
Tim: In 2015, I was still in the business, but my father wanted to step out, so I took over as the managing director, which had less to do with SAP than with running the company. I worked hard to train the competent people we have in-house so they could take over the daily management of the software.
Tim: Outside of actual business, I used to be one of the SAP mentors. There are only 150 worldwide. I got to do cool things with them, like traveling to some of the big SAP events, presenting Business One to some of the large enterprises. I even got Zal Parchem – the guy who co-wrote the book on SAP Business One – involved. He's brilliant. Richard Duffy, too.
Tim: And now we're a 15-person SME company. We buy valves and valve actuators. We control the flow of liquids, gases, or even vacuums. Our products are on oil rigs, water plants, food and drink sites, breweries, which is my favorite area, and anywhere you need to control the flow of liquid or gas. We buy and sell. We also do servicing, maintenance, and repair. That's me and the business in a nutshell, Carl.
Carl: That's quite a lot. Every small-medium business manager is quite a busy fellow, so we appreciate you taking time to talk with us today.
Tim: I forgot to mention that part of how we got together is my involvement with the UK and Ireland SAP user group. I used to be a chairman of the Business OneStream, organizing the Business One events. I stepped down as chairman, but I'm now a director of the actual user group. Still doing my bit for the SAP community.
Carl: I think it's remarkable you're on what we would call the board of directors and the only person from a Business One background I know who achieved that. Congrats to you.
Tim: Thank you.
Carl: Tim, you have an interesting background and many things that are unique to you, which is why I wanted you as a guest. Many listeners will be interested in what someone like you with a broader perspective can share.
Carl: My first question: there's a lot of buzz about artificial intelligence, the internet of things, machine learning, and more I can’t keep up with. What do you hear your customers, vendors, people in your supply chain, etc. talking about? What are they interested in, and what are you interested in for Zoedale regarding these technologies?
Tim: Our customers want to save time and money. If someone is doing a manual process ad nauseam, we ask, “Can that process be automated?” We see a lot of machine automation in factories now. Instead of someone standing on a production line and doing the same task repeatedly, there's a robot that can do the task. The robots don't take sick time or complain, and they’re multi-functional. We see that a lot in the manufacturing industry.
Tim: We also see a big drive to the IOT, internet of things. Some products we sell can be connected to the internet. There’s a valve in a pipeline. There’s an electric actuator on the top of the valve that opens and closes the valve. The actuator knows what normal is. If it detects anything abnormal in how the valve is opening and closing, it can send a signal or a message to an engineer that there might be a problem. If you have a valve that's worth £15-20,000, you want to know before there's a problem because on some pipelines, you can be talking about $1 million a day if they shut down.
Tim: From a product viewpoint, that's what people are talking about. From an SAP viewpoint, I know several businesses that run SAP Business One, and they're looking at things like intelligent picking and packing, with multilayer warehouses where you have huge 20-30-meter-tall racks. SAP will spit out a picking list, and the machine will go to the drawers, bring the drawers down, and do the picking. It saves enormous amounts of time, money, and floor space. You guys have a lot of room over there in the States, but the UK is quite a small island, and factory and warehouse space are in demand.
Tim: Maintenance and scheduling are others, so programming the valve or unit you sold. If we sell something to a customer, we want to build into the technology so it can alert the customer, "Your product is due for service." That can also drive revenue.
Carl: Your business is running SAP Business One, and you know others that do, but in your customer base, I imagine there are different things, and it's more about these new technologies than it is the ERP software. What do you consider the biggest challenges your customers face in using these technologies?
Tim: The biggest challenge in our industry is convincing engineers this stuff will work for them. I'm not talking about software engineers. I'm talking actual manual, physical, metal, or electrical engineers. Convincing them that a new, cool piece of software will benefit them and not be a risk to their jobs is challenging. Some people think, "I'm going to be replaced by a robot." But they’re not. If you're a highly skilled engineer, you're not. You’re going to learn a new technology that's going to save money – which means there will be more money to pay you bonuses. So, the biggest challenge is convincing the workers how good change can be.
Carl: People always believe they’ll lose their jobs, but throughout my career, I’ve mostly seen people repurposed.
Tim: Repurposed. Yes.
Carl: I've never seen technology negatively affect the workplace. I hear about it, but I've never experienced it.
Tim: What we talked about with those people links to my Biz.ONE presentation, which is how corporate culture and the way your employees think about change can affect your business strategy. If you want to do cool innovation that alters the way people work, you have to get the people on board before you make any changes. Otherwise, it will fail.
Carl: I'd love to talk with you more about that because it’s a project-by-project issue to a great degree. You've looked at that landscape, and I'm thinking more about you and your small business. What's the next big thing for your business, from a technology perspective?
Tim: The next big thing is moving more toward the cloud. We already use Office 365. Our email server is already in the cloud. We don't have an exchange server onsite anymore. We’re looking at moving to SharePoint and having all our document storage on SharePoint. We already use Microsoft Teams, which links nicely with SharePoint, and Microsoft is pushing people down this cloud/SharePoint/Teams route. That's the plan.
Tim: One challenge will be linking SAP Business One to Teams because the minute you open a document in SAP Business One and click on the attachment, it goes to a root folder in the directory on the server and opens it. How does that work if it's in the cloud somewhere? That's something we're working on with our SAP and Microsoft partners.
Carl: I haven't heard anyone else express that from that viewpoint, so it will be interesting to track that with you.
Carl: But on a more personal note, there's a lot of talk in the marketplace about the communication channels used between businesses and people. You travel a lot for your work, even if it's primarily in the UK, and I’m interested in how you do your business communication. Do you see changes coming, or are you experiencing any right now?
Tim: We moved a year ago to stop all internal communication by email and put it through Microsoft Teams. We have a channel for the whole company. Channels for social, management, etc. Someone would email, "John, what discount can I offer this new customer?" Then they’d CC everyone because they thought they had to cover their backside. People's inboxes were flooded – particularly for those not in the office all the time. I don't know what your inbox is like, Carl, but I probably get 100 to 150 a day.
Tim: We switched everything to MS Teams, which took some convincing, but Teams is brilliant. It’s backed up, so conversations are recorded and people's backsides are covered. It’s instant. I can be on a plane before they say to turn your phone off and a Teams message shows up, "This happened. What can we do?" Teams is also good for storing documents so we can collaborate. That's why we're looking at SharePoint, too. The biggest change for us in communication was not filling each other's inboxes with random emails.
Carl: Vision33 also moved towards Teams. We've always used similar things. For us, it's our team meetings, and they’ve become much easier as we did that, but we haven't tried to eliminate internal email. That's quite a step.
Carl: I'm fortunate that the number of people that report to me has diminished.
Tim: Oh, you're lucky.
Carl: I used to get 300 emails a day, and I was connected to way too many customers. I don't get most of that anymore. It's not the huge challenge it used to be because, whether it was purposeful or not, I funneled it down to what's important.
Tim: When I was a managing director, my inbox was getting bombarded because people feel the need to copy the managing directory on nearly every email. I wrote a rule in Outlook that if I was the CC, the email went to a folder called ‘CC Emails,’ which I checked twice a day. It was refreshing not to get CC’d so much. If you want me direct, email me direct.
Carl: Do you find an increase in customers or others using social media to communicate with you or Zoedale?
Tim: We do. We use Twitter, Instagram, and LinkedIn. We get customers who make inquiries through these channels and the website, but usually, it’s to initiate conversations that will then switch to more traditional email because we're sending documents or want to talk on the phone. So, the social streams are good for initiating conversations, and then they switch back to traditional methods.
Tim: I also have several customers and suppliers I know well, and we talk on WhatsApp. WhatsApp groups are useful, and I find it’s becoming more of a business communication tool because, unlike email, I check WhatsApp when a notification pops up.
Carl: Do you find it's easier to know who it is when you get something on WhatsApp, or can it be something out of the blue?
Tim: I'm talking about people I know well. For example, we're working on a big project with a soup company. There are two suppliers, a project engineer, and an engineering company involved. We have a WhatsApp group so the different organizations can stay updated. As I said, I'm more likely to check WhatsApp if it dings than if there's an email. Email feels less relevant now.
Carl: You know WhatsApp is about that project, so it's easier to prioritize it.
Tim: It is.
Carl: That's a great idea. I'm sure others will take that to heart and find ways to make use of something similar. You mentioned you're working with third parties and people outside Zoedale to close a new sale. What are the biggest challenges of collaborating with third parties?
Tim: Communication and ensuring what I say/mean is what the supplier or customer understood. When you're dealing cross-industry, the IT world has so many acronyms coming to the world of valves and actuators. Some of their acronyms are different than ours, and we deal with countries in Europe with different languages, too. It's taking what the customer says and thoroughly understanding what they want, then translating that, not language-wise, into something my supply can easily understand. We want to make sure we don't get the wrong thing. It's purely an understanding point of view.
Carl: Yes. Being sure that everything is understood. Most people don't know I spent about a decade in the oil-distributor ship business.
Tim: Oh, wow.
Carl: Once I got into the IT ERP world, I wasn't directly involved in that, but I went on a sales call once with the owner of my company to an oil-distributor ship company. Usually, our owner was very engaged in all conversations, but for the first time, he was silent. I asked why he didn't participate more. He said, "Because it was obvious they only wanted to talk to you because you knew everything about the industry – all the buzzwords, acronyms, etc." I think we won that deal mostly because we understood their business well.
Tim: I think that's right.
Carl: You’re right that it’s a real challenge to have those acronyms and be certain you understand them and they understand you.
Tim: We sell to the brewing industry, which I love because I love beer. I even opened my own microbrewery. We have a 65-liter microbrewery on site. We invite some of our brewery customers to come brew with us. When the brewers buy from us, they know they're dealing with a company that understands valves and the brewing process – the problems and how to solve them. It gives them confidence in us as a supplier.
Carl: That works well with something you love. I'm not sure it's a scalable idea to put up a sample industry for everybody you sell to, though!
Tim: I know. I did it mostly for personal reasons because it means I get decent beer for about £0.60 a bottle.
Carl: There's good motivation!
Carl: When you think about your customers, supply chain, etc., are there parts of the relationship that Zoedale has either succeeded at automating or is thinking about automating?
Tim: No, not yet. But we have a very large supplier – a huge global brand. They employ 80,000 people. Unfortunately, they don't use SAP; they use another ERP system. We place probably 10 purchase orders a day with them. We want to create automation wherein the purchase orders we enter into SAP can be collected at the end of the day and put into their ERP system with an EDI tool. We key a lot of orders every day, so they key a lot of orders every day, too. We're looking at tools where we'll key the orders in, they’ll get them, and they’ll automatically be keyed into their system.
Tim: To prepare for this, we added a field on the item master data called – well, I’m not sure; I think it's a foreign name – but we've renamed the field code to supplier code. We're populating that. When we send them an order, their supply code will be there, which is the key for them. It should make life easier. Less processing on our end and fewer mistakes, because obviously keying in a hundred purchase orders with 15-digit parts creates a huge margin for error. Whereas if you stick automation in there, that’s gone. That’s our project for the future.
Carl: It sounds like you have similar challenges to a lot of businesses. They need this function for maybe one or two suppliers, but they don't need a full-blown system because EDI isn’t cheap.
Tim: So true. If you look at an EDI system, you're looking at a fortune. We only need it for this one big supplier.
Carl: That’s a common experience. I would say when companies put in an EDI system, it's much easier to get another supplier or customer because the system's in place, but it's interesting. I'd love to track that with you to see what kind of low-cost, very-specific, one-supplier solution you choose. I'm sure we'll talk about it later.
Carl: My last question is about measuring or tracking things like that. You know sometimes you make time-consuming mistakes. Are you going to track the benefit?
Tim: We have several internal KPIs. One of them is our perfect order rate, which is orders shipped to the right customer, the right product, at the right time. Our current rate is around about 98.5% to 99%, which we're proud of.
Tim: We have another on the purchasing side, which is orders received on time and correct. Currently, that’s around the 75% mark. We think sticking EDI or other automation between our system and the supplier system will increase that to 85% or 90%. Otherwise, if we order something on a 10-week lead time from our supplier and it arrives wrong, the customer has to wait another 10 weeks to get the right product. That makes us look bad, regardless of whose mistake it is. The customer doesn't care. That’s the metric we’d like to improve.
Carl: Absolutely. Every time there's a return or a reshipment or something, there's money associated with that. There are other metrics you could throw in there that would scare you.
Carl: I have a little time left if you want to plug your Biz.ONE conference session. Tell us about it.
Tim: I’m attending all the days, which is fantastic. My session is at 11:00 on Monday morning, and I’ll be doing a 40-minute session about real-life experience and examples of how the wrong corporate culture can affect your business training strategies.
Tim: When I moved to this business, the first thing I did was change everything. I'd worked for an IT consultancy. Everyone loved change and new cool things because they were fun. Really, though, the project didn't go well. The SAP implementation was okay, but we suffered from poor adoption and low team morale. My session is explaining how my team and I managed to change and become a values- and principles-driven culture that drives change and innovation.
Tim: We have people working for us who knock on my door and say, "Hey, Tim. I have a brilliant idea. Can we do this in SAP?" Various managers have budgets, and I've said, "If this change will benefit you and it costs less than $1,000, do it. Don't even tell me." It's amazing to see people thinking for themselves about how good they can make SAP. My session will be quite an exciting session, hopefully, because it's real life. If you're coming to Biz.ONE, please see me on Monday.
Carl: I encourage everyone to do that. One of my best examples is a significant-sized company that did a Business One implementation for about 80 users. The company is very old. Its president conducted two meetings early in the process, each in a different region of the United States. There were 40 employees in each one, and he said, "We're going to do this. Here's why. I need you on board, and I need you to be excited." He became a real executive sponsor. It's the first time I'd ever seen someone who recognized how drastically it would affect his people.
Carl: I appreciate you talking to me, Tim. I'm sure there are things you mentioned that companies in similar industries with similar challenges will be interested in, so thank you for sharing. And I'll see you at the end of next month!
Tim: See you soon. Thanks for having me. And since it's 4:30 pm, and we allow people to have a decent beer at half-past four, I’m going to the beer fridge for a beer now. Enjoy the rest of your day, Carl.
Carl: I'll wait just a few more hours before I go there myself! Take care, my friend. Bye.
Tim: Thanks, Carl. Bye.
Carl: Until next time, I hope you all stay connected.