Detailed Notes
Most ERP and CRM implementation projects fail—but not for the reasons you think.
In this episode of the Building Better Developers podcast (Forward Momentum season), we sit down with Dustin Domerese to break down why so many ERP and CRM implementations struggle before they even begin.
The problem isn’t the software. It’s the lack of process clarity, alignment, and organizational readiness.
We cover: • What ERP and CRM really mean today • Why failure rates are so high • The SaaS trap (easy setup, hard adoption) • How poor processes get exposed—not fixed • Why most companies aren’t ready for these systems
If you’re planning an ERP or CRM project, this episode will help you avoid the most common (and costly) mistakes.
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Chapters
00:00 Intro 01:30 Meet Dustin Domerese 03:45 What is CRM vs ERP? 08:50 Why ERP and CRM projects fail 12:30 The SaaS trap explained 16:45 Software exposes broken processes 19:30 The process gap most companies miss 22:10 Why small companies struggle with big tools 25:00 Final thoughts
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Call to Action
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Transcript Text
Good morning. >> Uh, Michael. Dustin. Dustin. Michael. >> Hey, Dustin. >> Hey. Nice to >> Let's see. So, we're going to do this is we will uh we do this just sort of like a uh sort of talk through stuff. Uh keep it very conversational, not like we're not going to like pepper you with questions or anything like that. I mean, we will ask questions, that's for sure. But, >> uh what we'll do is um I'll introduce my we'll I'll start the episode, introduce myself, introduce Michael, uh and then allow you to introduce yourself. I'm sorry. What? >> I got an audio check. I could not hear Michael. >> Oh, that's because I've got him low. I don't hear your guest. Perfectly fine. >> Okay, Michael, say something. >> Hello. Test. >> Okay, Dustin. >> Testing one, two. >> Sounds good on my end. >> Sounds like Dustin's a little louder than you are. You may want to adjust you up a little, Michael. >> Um, totally blew me up. Um, let's see. Oh, so we're going to do we'll introduce me, introduce Michael, uh let you introduce yourself and uh we will dive right in. Um just questions and things of that nature. Um trying to find Oh, I did give I'm sorry. That's what I got to do is I gota go find your one pager because I got sent that. >> How's the audio now? >> Uh try up a little more if you can bring it up a tad. >> How about now? Can you say something, Dustin? >> Something Dustin. >> Yeah, you're still quiet, Michael. >> He's quiet on my end, too. I mean, I can hear him. Okay. So, >> yeah, it's just he's it's more work for him afterwards because he's going to do the editing. So, he needs to bring it up. Then, >> let me try my earbuds. I don't know what I have input all the way at 100. All right. How about now? >> And you, Dustin? >> How about now? >> Yep. Okay, that's a little better. I think we got you got you leveled out there. Um, so we will dive in. Uh, we do it as a a one-hour block. Uh, we end up actually splitting it into two episodes. It's podcast and video. Uh, I'll click and record. I am recording, right? Hello everybody on YouTube. We do we do preview um before the show. We'll have some stuff that's out on YouTube. We have some stuff afterwards. We'll have a little question bonus after we wrap up the audio version of it. And um other than that, I think pretty good. Like I said, we'll just we will plow right through. We'll do two of them. We'll split it into basically 20 to 25 minute episodes, something along those lines. And uh had that I think it'll be out in midapprilish. I think somewhere like that is where we're we're sort of targeting right now. Uh any questions or anything before we dive in? >> Um I I am not able to see my own video, which is totally fine, but I just wanted to make sure you guys can see me. Okay. >> Yep. See you. There's uh it's a little hard to read because it's like it's the reversed, but other than that, you should be good to go. >> Awesome. >> So, okay. And all right. And so we will just th Oh no. Well, hello and welcome back. We are yet again in another episode. This is Building Better Developers, the developer podcast. This season, we're getting unstuck. We're moving forward. We're getting some forward momentum. We're trying to start the year right. And in doing so, we're going to continue to have some conversations, including today of all day. So, buckle up. We're going to be ready for that shortly. First, I'll introduce myself. My name is Rob Broadhead, one of the founders of Developer, also the founder of RB Consulting. where we help you do a technology reality check, figure out where you at, what are you doing, what have you got before you make that big investment, that big leap into whatever your next project happens to be so you can make a smart step and not step into something a little bit uh you know cart before the horse. Good thing, bad thing. Bad thing, as you guys may know, uh I am not currently in the States. I will not be for a while and my time in Portugal is starting to slowly come to an end. Uh I'm now as I sit here a few weeks out of it and it's a little bit of a sadness. I have become attached to Porto faster than I thought I would. Uh and more so than I thought I would. But the good thing is is that it is you know I'm tired of cold. I'm tired of winry stuff even here where winter means like you know 55 60° Fahrenheit. Um I'm ready to go to the beach and that is where we are headed next. Uh but where you guys are headed next is Michael is going to go ahead and introduce himself. Hey everyone, my name is Michael Malash, one of the co-founders of developer, building better developers. I'm also the founder of Envision QA where we create reliable, tailored software that helps you work smarter, scale faster, and stay in control. Uh, good thing, bad thing? Well, unlike Rob, I'm still in the States and we are, uh, the good thing was last week we were having our fall spring. Uh, temperatures up in the 70s, shorts, and of course, you know, it's Tennessee weather, so you wake up in the morning and it's winter. B day. It's a nice spring. By mid-afternoon, you might be having summer. So, that's the bad thing. You never quite know what you should be wearing at what time of the day here. So, >> and an even better thing is we have our guest Dustin here today. I'm going to let you go ahead and dive in, introduce yourself. Hey Rob, Michael, good to be with you today. So, my name is Dustin Domice. I've got about two decades of consulting experience with SAP and Microsoft specifically around ERP and CRM platforms. Excited to chat with you a little bit today. The way you set that up, Rob, is really good about making good technology decisions. That's that's uh certainly something that we've all had experience with and can chat about a little bit more. But I I'll go with the good thing, bad thing, too. So, bad thing, I'm looking out my window and it's uh looks like it's cold and dreary and rainy. Um, and I guess that's a good thing because it normally is covered in snow outside this time of year here in Kansas City. So, we're we're actually having pretty decent weather. And bad thing though, um, you know, Rob, I I wish I was in in Portugal with you. I think that that would be nice. I Portugal is one of my favorite places on earth. It's such a beautiful beautiful spot and this is the right time of year to do that as well. >> Mhm. Yeah. Yeah, it is. Uh, it has been really nice. It's it is uh definitely unique based on what we've seen and so really enjoyed it. I want to dive right in because yeah, ERP CRM are um probably the things that got me into consulting myself was seeing those projects go bad. So often uh CRM back in the day now people sort of I feel have gotten a little better at it but definitely now ERPs um things that should take months often take years and I think a lot of it is is because of lack of preparation lack of understanding what people are setting stepping into. So I think to just set the table, let's start with the most basic of basics is give me a definition layman's definition of CRM and ERP ERP especially because I think that's where people sort of they get lost with that a little bit. >> That's a really good question. I mean CRM customer relationship management has expanded um throughout the last decade. I think whenever whenever I first started doing it, probably the same with you, Rob, it was it was Salesforce as the dominant player and and Microsoft and then there was the you know the act packs if you remember those software that were out there back in the day. Um and so at that time people were calling it CRM and really what it was was contact management a rolodex for for sales team to kind of be beat with a stick and say you got to put your stuff in and we need to know who you're calling on a daily basis. And it's evolved over time to now Microsoft's changed the term to more customer engagement where it's kind of an all-encompassing sales, marketing, customer service style tool. Um, ERP is kind of undergoing that same change and and I think fundamentally it's been that way all along, but there's a lot of people that are starting to get better educated now as to what is the difference between an accounting system and an ERP system. Um, enterprise resource planning is a lot different than just being able to track your general ledger and send an invoice out to your customers. and thinking about like where businesses start. That's of course always where someone starts. I mean, I can think about um you know, a lawn care business that my son's running and he needs to be able to send invoices. And so, I think that one's easy for everybody to get their head around. But when you start getting into supply chain and manufacturing and tracking bill of materials and assembly orders and some of those other things, it starts to get a little fuzzy for people about um where does an ERP system start and stop versus CRM start and stop. So that line is becoming more blurred over time for sure. But core business systems, everybody as you grow in an organization and mature in business, they've got to have those kinds of of systems in place to be able to do a better job of tracking customers and and business related tasks. Now, have you seen and you're because you're you're in like the perfect sweet spot of time as this has grown. Um it feels from the outside and and from the projects I've been on, I'm wondering from somebody it's in it all the time. Have you seen it get more I don't know complicated may not be the exact word but more more pieces uh like because you talk about you know especially when you add like drop shifting shipping and and all of the various the supply chain itself does it feel like that this something where there's like there's more players in it so even a smaller company has to sort of step up a little bit to be able to just to just go through their normal business >> yeah absolutely I mean think about like the you know if you go buy a a shirt online you see an ad on Instagram or Facebook and you're like, "Oh, that's a that's a cool shirt. Let me go let me go buy that t-shirt or dress shirt, whatever it is. I mean, that organization could be selling a few thousand SKs a year." Like, they may not be that large. They may be shipping things out of their garage. You don't know because the brand looks big. The customer service experience can look big. I mean, they may have a sophisticated, you know, chat, omni channel customer service experience where you can chat on their website. you can interact with them on social media, all of those things that come with the big brands. We're starting to see smaller and smaller organizations being able to roll out those kinds of advanced tools. And I think this creates this this disparity between organizations that are actually mature enough to adopt those kinds of tools and the availability of the tools themselves. It's really simple now for somebody to go on Microsoft's website or Salesforce or Oracle say I want to stand up a new Netswuite environment or a new Microsoft Business Central environment. In a few clicks they can have an ERP system but that doesn't mean that their organization is mature enough to be able to adopt some of these complexities that come along with it. >> So that's and this gets you're getting right into my sweet spot of stuff here is like is is it almost too simple now? Is it one of those things that or let me actually rephrase that is it sold as simpler than it is to do that because you said it it's it is with SAS and and the rise of it and especially the sort of the dominance no and it's not against them but like of your net suites and your sales forces and places like that that they they are now marketing to smaller companies to smaller businesses to startups to younger companies that just they don't have that they don't have as deep a a team a deep a bench I think to do some of those pieces and so are you seeing that where it's like it's almost it's not I'm trying to think of how to do it and be nice about it because it's not really bait and switch or anything like that because it is valuable stuff but it's almost like it's selling people more than they need or at least opening up to more that they need and then in your experience it's like how do you address that if somebody says hey I can I can get something spun up I can have a Salesforce site in you know 30 minutes I can have my stuff in there and I can be doing everything I want to do. Well, how do you how do you tackle that? >> Think about this. Standish group says 66% of these kind of projects fail. McKenzie says 17% of them threaten the survival of the organization. And BCG says 70% that do launch. So like you're already dealing with a pretty small margin that ever actually go to market to begin with. Like you you end up going live. 70% of them fail to deliver the outcome that the business expected that the system would generate to begin with. So we're dealing with a tiny little percentage of these types of digital transformation ERP CRM specifically that that fail and and very few that ever even deliver the outcome that they're expected. So, I think you're right, like we we think about software and in the sense of it's going to come and solve our business issues. Um, it's going to fix the drop ship problem, right? If I had some software that would allow me to dynamically be able to do addresses and drop ship locations and change the bill to of where I'm where I'm billing an invoice, that's just going to magically make me a better seller and a better deliverer overnight. And if you don't have the core processes in place to handle drop shipping today, I got news for you. People have been doing drop shipping for a long time. They just been doing it with sticky notes on a wall somewhere in the warehouse, right? Figuring out where they've got to do it. So if you don't have good processes today, implementing an ERP system is just going to expose the poor processes and it's probably going to end up shutting down your organization for a period of time while you catch up to the maturity of that kind of software. So, it's scary stuff for organizations that try to do this when they don't have that level of maturity. Um, you know, you should probably stay on QuickBooks if you're if you don't have the process maturity to support that kind of an ERP system. >> Now, do you feel like that's um that message is being is is getting across or is that something maybe where people are underserved and a little bit more they're pushed to like to be bigger maybe than they need to be? >> I'll tell you this this story is interesting. So, we we had a client not not too long ago that they just would not make the decision to upgrade and change the way they're doing their core processes internally. And um they were to the point where their they were the opposite, right? Their processes had matured internally to the place where everything was manual. like it became this this quagmire of spreadsheets and you know databases sitting underneath people's desks and like it was just a bad a bad environment. They were getting work done, but they just didn't have the maturity. And we came in said, "Look, this is you need to move. This is an ERP CRM strategy. The next two or three years, you do shorter rollouts, you can get to a maturity level." But they they decided not to do it. But here's the reason why they decided not to do it. Private equity was going to be coming in and they were going to planning to sell sell out to a PE firm within the next 18 months. and their decision was we didn't want to be in the middle of a software implementation uh whenever PE comes in to try to buy us. So like that that's not the right business decision. I think even even everyone in that conference room would have agreed like they needed to get mature with their systems but they their decision process was skewed because of some outside effect that may or may never happen. Um, and so they just become paralyzed in their decision-m process. And I think that happens with a lot of especially SMB organizations. They just get paralyzed in when is the right time, now is not the right time. Um, we we should we should do this, we shouldn't do this. Like there's this constant decision-making waffling that happens whenever we're starting to talk about these kind of systems. >> Yeah, I've seen that a lot too. both sides of it where sometimes like you say like they they don't want to spend the money because for variet they want to you know their bottom line is more important or whatever it is and they're scared of the price but then there's the other side where they're you know they're scared of not doing something and so they're they're trying to figure out like it's it's on both ends of it and trying to get some sort of balance to say look it's just like if you go into it with your eyes open and plan it out like you said if you've got good processes you'll be able to like find a way to do it if you don't know what your processes are or you've got bad process processes. This is just going to highlight them, which is I would I would hazard to guess that the ones that have like put the the companies on life support because of bad, you know, bad projects gone bad. I wonder how much of it was actually the business was already there. They just didn't realize it and then just this just sort of like uh hastened their demise for lack of a better term. >> Yeah. It becomes this magnifying glass to the parts of the organization that are broken. I mean, things that things that are working well are going to keep working well because you have smart people in the warehouse and they know how to run a forklift and and put things in boxes and put labels on them and get them out the door. They didn't need a system to be able to do that to begin with. Like they would have found a way because they they knew their job and they knew how to get work done. Um, but people who are unsure about what the process is, like sales processes, as you know, are are just atrocious. I mean, every seller sells different in most organizations. They all have their own way of doing things and they all say they're using the organization sales process. Um, and so when you go in and start talking to them, it's it's okay, tell me what you do. And you start doing these interviews and case studies. Um, everybody's doing it different. And and then you go interview senior leaders and then you ask them if they have a sales process. Of course, like we we have a sales process. Everyone's following it. You know, everything's great. And then you go talk to the individual sellers and they're like, "Yeah, no, I'm I'm writing it down on a piece of paper and it's sitting in my desk somewhere like that." That's the reality of processes is if you're not engaging with the people that are actually doing the work every day, you don't really know whether the processes are are to the level that the organization says that they are. You know, it's funny, you know, talking about these processes and and like these systems. It makes me think about accounting systems. You know, a lot of companies hire accountants, they hire CPAs. But I if you look at like the evolution of accounting software like in the old days, we just had like QuickBooks, like QuickBooks Express, a very easy Excel kind of spreadsheet. You do your tax. Now you have QuickBooks Pro and you have like the online. And every CPA I talk to is like, well, we don't like the online one at all because it doesn't do things the way CPAs are used to doing. Is it more the fact that the software is caught up to the process in that sense where it understands the individuals don't have these processes in place? So, the software itself is doing it for them so that they're still doing the accounting correctly, but it's in a different way than what most traditional CPAs are used to. So with these CPAs or sorry the CRM and the ERPs like Salesforce since they have such a high failure rate is it necessarily all on the businesses because they don't have the right processes or is it on the software more that they aren't able to adapt to these companies having different sales process different processes in place or no processes in place. you know, it it almost feels like there's a missing piece to this transition when these companies come in. Uh especially now that they're marketing to more, you know, more people, even these smaller companies, it's like there needs to be that filter, that thing in place that maybe transitions them in or walks them in or maybe I hate to say for lack of terms, but dumb it down for the user if you're going to expand your user base. Well, you you've seen Microsoft, Oracle, Salesforce, and SAP's market cap, right? Like uh they they know how to sell software. That that's for sure. And I think I read a statistic the other day that said, you know, if Microsoft and their surrounding partner network, if that group was a country, it would be the third largest GDP in the world. So like they know how to sell software and they know how to deliver new features and they know how to roll out things that people are going to buy but they don't these companies all struggle with actually understanding how adoption of those features and the software actually works in the real world. I mean the co-pilot statistics if you've seen any of those from Microsoft lately like they rolled out co-pilot as this you know it's it's it's great. It's the It's Microsoft's AI flavor. It can read all of your emails and your team's messages and all of your documents and it can use chat GPT style um style LLMs to be able to to generate cool things like proposals and answer questions about your business. Well, everyone is buying it. No one is using it. And so, like it's amazing. I mean, even internally as a consulting firm, and we're not that that large of a company, but we've got several hundred users that are that are on C-pilot internally, and we're a Microsoft consulting firm. Our adoption rates are through the floor. I mean, no one we're they all go to Chad GPT and upload upload the company documents there and and use it or claude or something else. No one is is adopting Copilot. And I don't even think that's necessarily a technology problem, although it is slow and there's some there's some reasons not to do it. But I think that's just purely human habits. Like you you the co-pilot was the first thing we all started using, right? I mean, unless you're super into AI, you probably co-pilot was your first experience with an LLM. Like, you know, write me a poem, like whatever the first, you know, tell me the greatest recipe for soup, you know, all of the the silly things that co-pilot was asked to do. I'm sorry that Chad GBT was asked to do at the beginning. I mean that is a perfect example of the human condition as it relates to software. I mean we we didn't ask it to go invent a new business model and and help us scale our organizations. We asked it for you know recipes. Um that that is in in a nutshell the reason why you can get such huge software revenue from these companies and such low adoption rates from individuals and businesses because there's just this this void that happens there. And and we we like to think about it as really a a fourpronged problem. Surveillance, performance, excellence, and automation. And it's all about like judging where you're at in your process and where are you expecting to get to if you don't even have surveillance today. In other words, you you can't see the data about your business. You you don't know what your metrics are. You can't tell me how many orders you've had this month. You can't tell me how much you've shipped this month. If you don't even know the numbers, how in the world are you going to get to the place where you're ready to use co-pilot to drive to drive some new automation? So it's a journey, right? Surveillance, the data, performance. Okay, we have the data. Do we actually know what good looks like? Um what are what are the metrics we're measuring ourselves on and are we hitting them? And then there's excellence. Excellent processes like we do everything the same way across the entire company, every person the same way every time. Only if you have surveillance, performance, and excellence should you even be thinking about automation. And so this journey from surveillance to automation I think is the biggest reason why software companies love to release features that have to do with excellence and automation. We're going to allow make it easier for you to have excellent processes and we're going to automate those processes once you have them. But organizations are most the time over in the surveillance and performance. They may have data, they're not confident in it. they they start to look across their organization and people question the report that's on the screen like ah that can't be right and so they're not even at surveillance and performance but yet software companies especially you know Microsoft is is such a broad company right in the things that they offer they're trying to push everybody into the excellence and automation category when most organizations need help with surveillance and performance >> do you think some of that might also have to do with uh like boards of directors like financing and things of that nature because I've noticed that some of the larger corporations I've worked for where like they had to do their board books, they had to put the proposals together for things. it always seemed to be like a one two week process and it always seemed like the even if the data wasn't right or the data was missing. They would have to do something to fudge the numbers or there always seemed to be more complexity with getting the data figuring out how the data is read before it gets passed up. I is that uh like you said, you know, maybe they don't have the surveillance on that, but is that just more an inherent issue still in the business sector versus, hey, we have these tools now, let's apply them. Is it just a lack of education on what's now available or just kind of also being stuck in that legacy mindset? >> No, I I think it is legacy mindset for the most part. I mean I think every organization has you know the the creative troublemaker um that is doing things their own way. You know we start digging into a lot of organizations. We we do something called an asis whenever we begin with a company that is looking to take an initiative like this and it quite literally is a bunch of word documents. This sounds archaic but a bunch of word documents that click by click everything that a person does in order to do every one of their business process. and we document exactly what's happening today. And it's shocking for senior leadership to see how that report to your point, Michael, like how does that report actually get generated every quarter before the board meeting? Well, you know, it's Mary in accounting and the Excel spreadsheet that she's got on her desktop, right, that's not backed up and not secured that is driving all of the analytics behind the board report. And this is I mean we're talking about Fortune 1000 companies are doing this kind of stuff. This is not an epidemic of the small. It's an epidemic of humans. Um and really getting to the point where they just don't want to change the way that they're doing things. I think also we think about like generally it's the IT departments that are selecting and being in charge of implementation of these software products and you know like it or not there's always been this well you're with the business well you're with it like this this wall that happens between people who use the software um and those that actually are responsible for making sure it's running and they select it and and help with those things. The truth is people select software and and it's bias always. Um and so if you're going to be biased, I would much rather be biased towards the people who are going to use it so that way your adoption rates would go up rather than letting it departments make the decision um as to how how software gets selected. I mean, if you think about most ERP and CRM projects, they're governed and run by an IT department. Um, and then those same team members may never log in to the system that they help select and implement. Um, it it's it is wild. And so it's it's just a it's a it's a challenge, but I think organizations are really to to put this on a positive note. There are a lot of organizations that are beginning to adopt things like a center of excellence or a training program inside of their organization to help upskill your business users into a better understanding of these technology products. And I think tools like chat GPT and co-pilot and some of the other AI tools are helping those that are hungry for knowledge to be able to learn faster than they ever have. And I'm interested to see if we don't see like a flip between the excellence and the automation where people start moving automation before they have processes now because you know LLMs are creating new processes for people or documenting ones that may have never existed before. It's an interesting time and I think those that are really hungry for that kind of change are going to see a lot of improvement in their own personal skills and businesses across the world. SMBs are going to start moving into that mid-market category as long as they're hungry for this kind of new technology adoption that's happening right now. And that is where we're going to pause. But don't worry, we are not done with Dustin yet. He's got plenty more to come. Uh yes, we'll talk about AI. I know we always have to talk about about AI and we do. Uh but it's actually a really good conversation. Yet again, um it's one of those that he is a little what we're talking about is a little bigger, I think, than some of us deal with because if you're side hustling, you don't need a probably don't even need a full-blown CRM. You just need like a spreadsheet. You don't need that much. You definitely aren't going to need an ERP, I would think, but your business might. And I think there's a lot of key things that we touch on here that are really valuable to all of us because it really comes back to understanding your business, understanding your why, understanding the problem you're solving. And we talk a lot about this both this episode and the next one with Dustin about overdoing it basically is it you don't always need every single feature. And think about that while you're building whatever solution is you're building because sometimes we have a tendency to just add too much to try to make it better. And more does not always equal better. That being said, it's time for us to wrap this one up. So, go out there and have yourself a great day, a great week, and we will talk to you next time.
Transcript Segments
Good morning.
>> Uh, Michael. Dustin. Dustin. Michael.
>> Hey, Dustin.
>> Hey. Nice to
>> Let's see.
So, we're going to do this is we will uh
we do this just sort of like a uh sort
of talk through stuff. Uh keep it very
conversational, not like we're not going
to like pepper you with questions or
anything like that. I mean, we will ask
questions, that's for sure. But,
>> uh what we'll do is um I'll introduce my
we'll I'll start the episode, introduce
myself, introduce Michael, uh and then
allow you to introduce yourself. I'm
sorry. What?
>> I got an audio check. I could not hear
Michael.
>> Oh, that's because I've got him low. I
don't hear your guest. Perfectly fine.
>> Okay, Michael, say something.
>> Hello. Test.
>> Okay, Dustin.
>> Testing one, two.
>> Sounds good on my end.
>> Sounds like Dustin's a little louder
than you are. You may want to adjust you
up a little, Michael.
>> Um,
totally blew me up. Um, let's see. Oh,
so we're going to do we'll introduce me,
introduce Michael, uh let you introduce
yourself and uh we will dive right in.
Um just questions and things of that
nature. Um trying to find Oh, I did give
I'm sorry. That's what I got to do is I
gota go find your one pager because I
got sent that.
>> How's the audio now?
>> Uh try up a little more if you can bring
it up a tad.
>> How about now?
Can you say something, Dustin?
>> Something Dustin.
>> Yeah, you're still quiet, Michael.
>> He's quiet on my end, too.
I mean, I can hear him. Okay. So,
>> yeah, it's just he's it's more work for
him afterwards because he's going to do
the editing. So, he needs to bring it
up. Then,
>> let me try my earbuds. I don't know what
I have input all the way at 100.
All right. How about now?
>> And you, Dustin?
>> How about now?
>> Yep. Okay, that's a little better. I
think we got you got you leveled out
there. Um, so we will dive in. Uh, we do
it as a a one-hour block. Uh, we end up
actually splitting it into two episodes.
It's podcast and video. Uh, I'll click
and record. I am recording, right? Hello
everybody on YouTube. We do we do
preview um before the show. We'll have
some stuff that's out on YouTube. We
have some stuff afterwards. We'll have a
little question bonus after we wrap up
the audio version of it. And um other
than that, I think pretty good. Like I
said, we'll just we will plow right
through. We'll do two of them. We'll
split it into basically 20 to 25 minute
episodes, something along those lines.
And uh had that I think it'll be out in
midapprilish. I think somewhere like
that is where we're we're sort of
targeting right now. Uh any questions or
anything before we dive in?
>> Um I I am not able to see my own video,
which is totally fine, but I just wanted
to make sure you guys can see me. Okay.
>> Yep. See you. There's uh it's a little
hard to read because it's like it's the
reversed, but other than that, you
should be good to go.
>> Awesome.
>> So, okay.
And all right. And so we will just th
Oh no. Well, hello and welcome back. We
are yet again in another episode. This
is Building Better Developers, the
developer podcast. This season, we're
getting unstuck. We're moving forward.
We're getting some forward momentum.
We're trying to start the year right.
And in doing so, we're going to continue
to have some conversations, including
today of all day. So, buckle up. We're
going to be ready for that shortly.
First, I'll introduce myself. My name is
Rob Broadhead, one of the founders of
Developer, also the founder of RB
Consulting. where we help you do a
technology reality check, figure out
where you at, what are you doing, what
have you got before you make that big
investment, that big leap into whatever
your next project happens to be so you
can make a smart step and not step into
something a little bit uh you know cart
before the horse. Good thing, bad thing.
Bad thing, as you guys may know, uh I am
not currently in the States. I will not
be for a while and my time in Portugal
is starting to slowly come to an end. Uh
I'm now as I sit here a few weeks out of
it and it's a little bit of a sadness. I
have become attached to Porto faster
than I thought I would. Uh and more so
than I thought I would. But the good
thing is is that it is you know I'm
tired of cold. I'm tired of winry stuff
even here where winter means like you
know 55 60° Fahrenheit. Um I'm ready to
go to the beach and that is where we are
headed next. Uh but where you guys are
headed next is Michael is going to go
ahead and introduce himself.
Hey everyone, my name is Michael Malash,
one of the co-founders of developer,
building better developers. I'm also the
founder of Envision QA where we create
reliable, tailored software that helps
you work smarter, scale faster, and stay
in control. Uh, good thing, bad thing?
Well, unlike Rob, I'm still in the
States and we are, uh, the good thing
was last week we were having our fall
spring. Uh, temperatures up in the 70s,
shorts, and of course, you know, it's
Tennessee weather, so you wake up in the
morning and it's winter.
B day. It's a nice spring. By
mid-afternoon, you might be having
summer. So, that's the bad thing. You
never quite know what you should be
wearing at what time of the day here.
So,
>> and an even better thing is we have our
guest Dustin here today. I'm going to
let you go ahead and dive in, introduce
yourself. Hey Rob, Michael, good to be
with you today. So, my name is Dustin
Domice. I've got about two decades of
consulting experience with SAP and
Microsoft specifically around ERP and
CRM platforms. Excited to chat with you
a little bit today. The way you set that
up, Rob, is really good about making
good technology decisions. That's that's
uh certainly something that we've all
had experience with and can chat about a
little bit more. But I I'll go with the
good thing, bad thing, too. So, bad
thing, I'm looking out my window and
it's uh looks like it's cold and dreary
and rainy. Um, and I guess that's a good
thing because it normally is covered in
snow outside this time of year here in
Kansas City. So, we're we're actually
having pretty decent weather. And bad
thing though, um, you know, Rob, I I
wish I was in in Portugal with you. I
think that that would be nice. I
Portugal is one of my favorite places on
earth. It's such a beautiful beautiful
spot and this is the right time of year
to do that as well.
>> Mhm. Yeah. Yeah, it is. Uh, it has been
really nice. It's it is uh definitely
unique based on what we've seen and so
really enjoyed it. I want to dive right
in because yeah, ERP CRM are um probably
the things that got me into consulting
myself was seeing those projects go bad.
So often uh CRM back in the day now
people sort of I feel have gotten a
little better at it but definitely now
ERPs um things that should take months
often take years and I think a lot of it
is is because of lack of preparation
lack of understanding what people are
setting stepping into. So I think to
just set the table, let's start with the
most basic of basics is give me a
definition layman's definition of CRM
and ERP ERP especially because I think
that's where people sort of they get
lost with that a little bit.
>> That's a really good question. I mean
CRM customer relationship management has
expanded um throughout the last decade.
I think whenever whenever I first
started doing it, probably the same with
you, Rob, it was it was Salesforce as
the dominant player and and Microsoft
and then there was the you know the act
packs if you remember those software
that were out there back in the day. Um
and so at that time people were calling
it CRM and really what it was was
contact management a rolodex for for
sales team to kind of be beat with a
stick and say you got to put your stuff
in and we need to know who you're
calling on a daily basis. And it's
evolved over time to now Microsoft's
changed the term to more customer
engagement where it's kind of an
all-encompassing sales, marketing,
customer service style tool. Um, ERP is
kind of undergoing that same change and
and I think fundamentally it's been that
way all along, but there's a lot of
people that are starting to get better
educated now as to what is the
difference between an accounting system
and an ERP system. Um, enterprise
resource planning is a lot different
than just being able to track your
general ledger and send an invoice out
to your customers. and thinking about
like where businesses start. That's of
course always where someone starts. I
mean, I can think about um you know, a
lawn care business that my son's running
and he needs to be able to send
invoices. And so, I think that one's
easy for everybody to get their head
around. But when you start getting into
supply chain and manufacturing and
tracking bill of materials and assembly
orders and some of those other things,
it starts to get a little fuzzy for
people about um where does an ERP system
start and stop versus CRM start and
stop. So that line is becoming more
blurred over time for sure. But core
business systems, everybody as you grow
in an organization and mature in
business, they've got to have those
kinds of of systems in place to be able
to do a better job of tracking customers
and and business related tasks.
Now, have you seen and you're because
you're you're in like the perfect sweet
spot of time as this has grown. Um it
feels from the outside and and from the
projects I've been on, I'm wondering
from somebody it's in it all the time.
Have you seen it get more
I don't know complicated may not be the
exact word but more more pieces uh like
because you talk about you know
especially when you add like drop
shifting shipping and and all of the
various the supply chain itself does it
feel like that this something where
there's like there's more players in it
so even a smaller company has to sort of
step up a little bit to be able to just
to just go through their normal business
>> yeah absolutely I mean think about like
the you know if you go buy a a shirt
online you see an ad on Instagram or
Facebook and you're like, "Oh, that's a
that's a cool shirt. Let me go let me go
buy that t-shirt or dress shirt,
whatever it is. I mean, that
organization could be selling a few
thousand SKs a year." Like, they may not
be that large. They may be shipping
things out of their garage. You don't
know because the brand looks big. The
customer service experience can look
big. I mean, they may have a
sophisticated, you know, chat, omni
channel customer service experience
where you can chat on their website. you
can interact with them on social media,
all of those things that come with the
big brands. We're starting to see
smaller and smaller organizations being
able to roll out those kinds of advanced
tools. And I think this creates this
this disparity between organizations
that are actually mature enough to adopt
those kinds of tools and the
availability of the tools themselves.
It's really simple now for somebody to
go on Microsoft's website or Salesforce
or Oracle say I want to stand up a new
Netswuite environment or a new Microsoft
Business Central environment. In a few
clicks they can have an ERP system but
that doesn't mean that their
organization is mature enough to be able
to adopt some of these complexities that
come along with it.
>> So that's and this gets you're getting
right into my sweet spot of stuff here
is like is is it almost too simple now?
Is it one of those things that or let me
actually rephrase that is it sold as
simpler than it is to do that because
you said it it's it is with SAS and and
the rise of it and especially the sort
of the dominance no and it's not against
them but like of your net suites and
your sales forces and places like that
that they they are now marketing to
smaller companies to smaller businesses
to startups to younger companies that
just they don't have that they don't
have as deep a a team a deep a bench I
think to do some of those pieces and so
are you seeing that where it's like it's
almost it's not I'm trying to think of
how to do it and be nice about it
because it's not really bait and switch
or anything like that because it is
valuable stuff but it's almost like it's
selling people more than they need or at
least opening up to more that they need
and then in your experience it's like
how do you address that if somebody says
hey I can I can get something spun up I
can have a Salesforce site in you know
30 minutes I can have my stuff in there
and I can be doing everything I want to
do. Well, how do you how do you tackle
that?
>> Think about this. Standish group says
66% of these kind of projects fail.
McKenzie says 17% of them threaten the
survival of the organization. And BCG
says 70% that do launch. So like you're
already dealing with a pretty small
margin that ever actually go to market
to begin with. Like you you end up going
live. 70% of them fail to deliver the
outcome that the business expected that
the system would generate to begin with.
So we're dealing with a tiny little
percentage of these types of digital
transformation ERP CRM specifically that
that fail and and very few that ever
even deliver the outcome that they're
expected. So, I think you're right, like
we we think about software and in the
sense of it's going to come and solve
our business issues. Um, it's going to
fix the drop ship problem, right? If I
had some software that would allow me to
dynamically be able to do addresses and
drop ship locations and change the bill
to of where I'm where I'm billing an
invoice, that's just going to magically
make me a better seller and a better
deliverer overnight. And if you don't
have the core processes in place to
handle drop shipping today, I got news
for you. People have been doing drop
shipping for a long time. They just been
doing it with sticky notes on a wall
somewhere in the warehouse, right?
Figuring out where they've got to do it.
So if you don't have good processes
today, implementing an ERP system is
just going to expose the poor processes
and it's probably going to end up
shutting down your organization for a
period of time while you catch up to the
maturity of that kind of software. So,
it's scary stuff for organizations that
try to do this when they don't have that
level of maturity. Um, you know, you
should probably stay on QuickBooks if
you're if you don't have the process
maturity to support that kind of an ERP
system.
>> Now, do you feel like that's um that
message is being is is getting across or
is that something maybe where people are
underserved and a little bit more
they're pushed to like to be bigger
maybe than they need to be?
>> I'll tell you this this story is
interesting. So, we we had a client not
not too long ago that they just would
not make the decision to upgrade and
change the way they're doing their core
processes internally. And um they were
to the point where their they were the
opposite, right? Their processes had
matured internally to the place where
everything was manual. like it became
this this quagmire of spreadsheets and
you know databases sitting underneath
people's desks and like it was just a
bad a bad environment. They were getting
work done, but they just didn't have the
maturity. And we came in said, "Look,
this is you need to move. This is an ERP
CRM strategy. The next two or three
years, you do shorter rollouts, you can
get to a maturity level." But they they
decided not to do it. But here's the
reason why they decided not to do it.
Private equity was going to be coming in
and they were going to planning to sell
sell out to a PE firm within the next 18
months. and their decision was we didn't
want to be in the middle of a software
implementation
uh whenever PE comes in to try to buy
us. So like that that's not the right
business decision. I think even even
everyone in that conference room would
have agreed like they needed to get
mature with their systems but they their
decision process was skewed because of
some outside effect that may or may
never happen. Um, and so they just
become paralyzed in their decision-m
process. And I think that happens with a
lot of especially SMB organizations.
They just get paralyzed in when is the
right time, now is not the right time.
Um, we we should we should do this, we
shouldn't do this. Like there's this
constant decision-making waffling that
happens whenever we're starting to talk
about these kind of systems.
>> Yeah, I've seen that a lot too. both
sides of it where sometimes like you say
like they they don't want to spend the
money because for variet they want to
you know their bottom line is more
important or whatever it is and they're
scared of the price but then there's the
other side where they're you know
they're scared of not doing something
and so they're they're trying to figure
out like it's it's on both ends of it
and trying to get some sort of balance
to say look it's just like if you go
into it with your eyes open and plan it
out like you said if you've got good
processes you'll be able to like find a
way to do it if you don't know what your
processes are or you've got bad process
processes. This is just going to
highlight them, which is I would I would
hazard to guess that the ones that have
like put the the companies on life
support because of bad, you know, bad
projects gone bad. I wonder how much of
it was actually the business was already
there. They just didn't realize it and
then just this just sort of like uh
hastened their demise for lack of a
better term.
>> Yeah. It becomes this magnifying glass
to the parts of the organization that
are broken. I mean, things that things
that are working well are going to keep
working well because you have smart
people in the warehouse and they know
how to run a forklift and and put things
in boxes and put labels on them and get
them out the door. They didn't need a
system to be able to do that to begin
with. Like they would have found a way
because they they knew their job and
they knew how to get work done. Um, but
people who are unsure about what the
process is, like sales processes, as you
know, are are just atrocious. I mean,
every seller sells different in most
organizations. They all have their own
way of doing things and they all say
they're using the organization sales
process. Um, and so when you go in and
start talking to them, it's it's okay,
tell me what you do. And you start doing
these interviews and case studies. Um,
everybody's doing it different. And and
then you go interview senior leaders and
then you ask them if they have a sales
process. Of course, like we we have a
sales process. Everyone's following it.
You know, everything's great. And then
you go talk to the individual sellers
and they're like, "Yeah, no, I'm I'm
writing it down on a piece of paper and
it's sitting in my desk somewhere like
that." That's the reality of processes
is if you're not engaging with the
people that are actually doing the work
every day, you don't really know whether
the processes are are to the level that
the organization says that they are.
You know, it's funny, you know, talking
about these processes and and like these
systems. It makes me think about
accounting systems. You know, a lot of
companies hire accountants, they hire
CPAs. But I if you look at like the
evolution of accounting software like in
the old days, we just had like
QuickBooks, like QuickBooks Express, a
very easy Excel kind of spreadsheet. You
do your tax. Now you have QuickBooks Pro
and you have like the online. And every
CPA I talk to is like, well, we don't
like the online one at all because it
doesn't do things the way CPAs are used
to doing. Is it more the fact that the
software is caught up to the process in
that sense where it understands the
individuals don't have these processes
in place? So, the software itself is
doing it for them so that they're still
doing the accounting correctly, but it's
in a different way than what most
traditional CPAs are used to. So with
these CPAs or sorry the CRM and the ERPs
like Salesforce
since they have such a high failure rate
is it necessarily all on the businesses
because they don't have the right
processes or is it on the software more
that they aren't able to adapt to these
companies having different sales process
different processes in place or no
processes in place. you know, it it
almost feels like there's a missing
piece to this transition when these
companies come in. Uh especially now
that they're marketing to more, you
know, more people, even these smaller
companies, it's like there needs to be
that filter, that thing in place that
maybe transitions them in or walks them
in or maybe I hate to say for lack of
terms, but dumb it down for the user if
you're going to expand your user base.
Well, you you've seen Microsoft, Oracle,
Salesforce, and SAP's market cap, right?
Like uh they they know how to sell
software. That that's for sure. And I
think I read a statistic the other day
that said, you know, if Microsoft
and their surrounding partner network,
if that group was a country, it would be
the third largest GDP in the world. So
like they know how to sell software and
they know how to deliver new features
and they know how to roll out things
that people are going to buy but they
don't these companies all struggle with
actually understanding how adoption of
those features and the software actually
works in the real world. I mean the
co-pilot statistics if you've seen any
of those from Microsoft lately like they
rolled out co-pilot as this you know
it's it's it's great. It's the It's
Microsoft's AI flavor. It can read all
of your emails and your team's messages
and all of your documents and it can use
chat GPT style um style LLMs to be able
to to generate cool things like
proposals and answer questions about
your business. Well, everyone is buying
it. No one is using it. And so, like
it's amazing. I mean, even internally as
a consulting firm, and we're not that
that large of a company, but we've got
several hundred users that are that are
on C-pilot internally, and we're a
Microsoft consulting firm. Our adoption
rates are through the floor. I mean, no
one we're they all go to Chad GPT and
upload upload the company documents
there and and use it or claude or
something else. No one is is adopting
Copilot. And I don't even think that's
necessarily a technology problem,
although it is slow and there's some
there's some reasons not to do it. But I
think that's just purely human habits.
Like you you the co-pilot was the first
thing we all started using, right? I
mean, unless you're super into AI, you
probably co-pilot was your first
experience with an LLM. Like, you know,
write me a poem, like whatever the
first, you know, tell me the greatest
recipe for soup, you know, all of the
the silly things that co-pilot was asked
to do. I'm sorry that Chad GBT was asked
to do at the beginning. I mean that is a
perfect example of the human condition
as it relates to software. I mean we we
didn't ask it to go invent a new
business model and and help us scale our
organizations. We asked it for you know
recipes. Um that that is in in a
nutshell the reason why you can get such
huge software revenue from these
companies and such low adoption rates
from individuals and businesses because
there's just this this void that happens
there. And and we we like to think about
it as really a a fourpronged
problem. Surveillance, performance,
excellence, and automation. And it's all
about like judging where you're at in
your process and where are you expecting
to get to if you don't even have
surveillance today. In other words, you
you can't see the data about your
business. You you don't know what your
metrics are. You can't tell me how many
orders you've had this month. You can't
tell me how much you've shipped this
month. If you don't even know the
numbers, how in the world are you going
to get to the place where you're ready
to use co-pilot to drive to drive some
new automation?
So it's a journey, right? Surveillance,
the data, performance. Okay, we have the
data. Do we actually know what good
looks like? Um what are what are the
metrics we're measuring ourselves on and
are we hitting them? And then there's
excellence. Excellent processes like we
do everything the same way across the
entire company, every person the same
way every time. Only if you have
surveillance, performance, and
excellence should you even be thinking
about automation. And so this journey
from surveillance to automation I think
is the biggest reason why software
companies love to release features that
have to do with excellence and
automation.
We're going to allow make it easier for
you to have excellent processes and
we're going to automate those processes
once you have them. But organizations
are most the time over in the
surveillance and performance. They may
have data, they're not confident in it.
they they start to look across their
organization and people question the
report that's on the screen like ah that
can't be right and so they're not even
at surveillance and performance but yet
software companies especially you know
Microsoft is is such a broad company
right in the things that they offer
they're trying to push everybody into
the excellence and automation category
when most organizations need help with
surveillance and performance
>> do you think some of that might also
have to do with uh like boards of
directors like financing and things of
that nature because I've noticed that
some of the larger corporations I've
worked for where like they had to do
their board books, they had to put the
proposals together for things. it always
seemed to be like a one two week process
and it always seemed like the even if
the data wasn't right or the data was
missing. They would have to do something
to fudge the numbers or there always
seemed to be more complexity with
getting the data figuring out how the
data is read before it gets passed up. I
is that uh like you said, you know,
maybe they don't have the surveillance
on that, but is that just more an
inherent issue still in the business
sector versus, hey, we have these tools
now, let's apply them. Is it just a lack
of education on what's now available or
just kind of also being stuck in that
legacy mindset?
>> No, I I think it is legacy mindset for
the most part. I mean I think every
organization has you know the the
creative troublemaker
um that is doing things their own way.
You know we start digging into a lot of
organizations. We we do something called
an asis whenever we begin with a company
that is looking to take an initiative
like this and it quite literally is a
bunch of word documents. This sounds
archaic but a bunch of word documents
that click by click everything that a
person does in order to do every one of
their business process. and we document
exactly what's happening today. And it's
shocking for senior leadership to see
how that report to your point, Michael,
like how does that report actually get
generated every quarter before the board
meeting? Well, you know, it's Mary in
accounting and the Excel spreadsheet
that she's got on her desktop, right,
that's not backed up and not secured
that is driving all of the analytics
behind the board report. And this is I
mean we're talking about Fortune 1000
companies are doing this kind of stuff.
This is not an epidemic of the small.
It's an epidemic of humans. Um and
really getting to the point where they
just don't want to change the way that
they're doing things. I think also we
think about like generally it's the IT
departments that are selecting and being
in charge of implementation of these
software products and you know like it
or not there's always been this well
you're with the business well you're
with it like this this wall that happens
between people who use the software um
and those that actually are responsible
for making sure it's running and they
select it and and help with those
things. The truth is people select
software and and it's bias always. Um
and so if you're going to be biased, I
would much rather be biased towards the
people who are going to use it so that
way your adoption rates would go up
rather than letting it departments make
the decision um as to how how software
gets selected. I mean, if you think
about most ERP and CRM projects, they're
governed and run by an IT department.
Um, and then those same team members may
never log in to the system that they
help select and implement. Um, it it's
it is wild. And so it's it's just a it's
a it's a challenge, but I think
organizations are really to to put this
on a positive note. There are a lot of
organizations that are beginning to
adopt things like a center of excellence
or a training program inside of their
organization to help upskill your
business users into a better
understanding of these technology
products. And I think tools like chat
GPT and co-pilot and some of the other
AI tools are helping those that are
hungry for knowledge to be able to learn
faster than they ever have. And I'm
interested to see if we don't see like a
flip between the excellence and the
automation where people start moving
automation before they have processes
now because you know LLMs are creating
new processes for people or documenting
ones that may have never existed before.
It's an interesting time and I think
those that are really hungry for that
kind of change are going to see a lot of
improvement in their own personal skills
and businesses across the world. SMBs
are going to start moving into that
mid-market category as long as they're
hungry for this kind of new technology
adoption that's happening right now.
And that is where we're going to pause.
But don't worry, we are not done with
Dustin yet. He's got plenty more to
come. Uh yes, we'll talk about AI. I
know we always have to talk about about
AI and we do. Uh but it's actually a
really good conversation. Yet again, um
it's one of those that he is a little
what we're talking about is a little
bigger, I think, than some of us deal
with because if you're side hustling,
you don't need a probably don't even
need a full-blown CRM. You just need
like a spreadsheet. You don't need that
much. You definitely aren't going to
need an ERP, I would think, but your
business might. And I think there's a
lot of key things that we touch on here
that are really valuable to all of us
because it really comes back to
understanding your business,
understanding your why, understanding
the problem you're solving. And we talk
a lot about this both this episode and
the next one with Dustin about
overdoing it basically is it you don't
always need every single feature. And
think about that while you're building
whatever solution is you're building
because sometimes we have a tendency to
just add too much to try to make it
better. And more does not always equal
better. That being said, it's time for
us to wrap this one up. So, go out there
and have yourself a great day, a great
week, and we will talk to you next time.