How Danforth Pewter crafted a move from legacy to modern ERP

SUMMARY:

Few things are more painful for a growing small business than outdated IT systems and antiquated software. That goes double in a volatile industry like retail. Here’s the story of how Danforth Pewter moved to a modern Acumatica ERP system, and what they overcame along the way.

danforth-pewter-storefrontIn 2013, Danforth Pewter CEO Bram Kleppner found himself in a classic small business predicament. After (almost) forty years of successful retail ventures in Vermont, Danforth Pewter’s ancient software was showing wear and tear. With a growing e-commerce business and plenty of storefront challenges, Kleppner knew he needed modern ERP software.

But could a 60+ employee business find something that met their scale and retail complexity – 2,200 SKUs and counting – without pricing them out? And speaking of employees, would they resist changing systems they had used for a decade? Kleppner’s dilemma, and his eventual move to Acumatica ERP, was the subject of our chat at the Acumatica Summit.

Since then, Kleppner’s been pushing towards a tough year end close, pulling data from three disparate systems – hopefully for the last time. Here’s what I learned at the show, and what happened next.

The name Danforth Pewter hails back to the 1700s; store founders Fred and Judi Danforth trace their passion for functional, hand-crafted pieces back to the pewter smiths in their ancestry. Today, Danforth Pewter still makes all of its artisan wares by hand in Vermont, and sells them in six retail stores (five in Vermont). Online sales account for one-third of total revenues and growing (jewelry and holiday ornaments are two popular categories). Social responsibility and the loyalty of long-term employees are key ingredients in Danforth Pewter’s longevity.

Software selection, and the perils of risking a bad fit

But in 2013, Danforth Pewter’s software was reaching a breaking point. The point of sale (POS) and financial systems weren’t integrated. And that wasn’t the only problem. As Kleppner told me:

The breaking point was really the fact that our hardware and software were all ancient, and the hardware was beginning to fail. The software was such an old version that it would not run on new hardware. We had to upgrade everything at once.

2014 ushered in a rigorous period of evaluation. The IT shop supporting their old Sage system closed up, referring them to a new services partner. Kleppner’s first plan was to upgrade both the point of sale and the Sage system. But at the last minute, Kleppner put on the brakes. He told his new partner:

Look, this is the solution we’re going forward with, but we’re not all that happy with it. It’s the best we could find. We’re getting a POS system, and a finance and order processing system, and then we’re going to have to pay someone a bunch of money to integrate them… and the new version of Sage, we’re not all the impressed with it.

To their credit, Danforth Pewter’s new partner admitted the same:

They finally said, “Well, to be perfectly honest with you, we’re not all that impressed with it either. It sounded like what you guys wanted to do, so we were going to support it, but there is this other thing we found as an alternative that fits well.

Reading between the lines, both sides in this partnership probably learned something about the need for painfully direct communication during the evaluation process. But the silver lining was the partner’s ultimate recommendation of Acumatica. Though Acumatica is known as a “cloud ERP” solution, Acumatica provides several deployment options, including on-site hosted. This was important to Kleppner:

We are now hosting our own instance, in a server sitting in a room just like the old days. The only reason for that is we’re in a rural, northern, small town where the internet goes down a lot. If we’re relying on the cloud and then web goes down then we can’t use it… The uptime across Acumatica’s customer base is 99.98 percent; we would have brought that average down. As soon as we get reliable net, we’ll probably push Acumatica out to the cloud.

After such an exhaustive search, Kleppner was surprised to find out that Acumatica met all his “complex SMB” criteria:

What we looked for and did not find [until Acumatica], was a solution that would integrate our POS system, our financials, our manufacturing, our order processing, and our orders flowing in from the web. A system that would integrate all of that – on a budget of a small company. People would say, “Hey, you want to spend five million dollars?” I was told by a couple of industry experts, “What you’re looking for at your size does not exist.”

The push to go-live – “We all have friends and colleagues who’ve had disasters”

bram-kleppner-danforthOnce Kleppner got over his excitement of finding a good fit, there was work to do. Two of Acumatica’s most robust industry partners/solutions, Fusion POS for retail, and JAAS for Manufacturing came into play, with Fusion POS playing a key role tying systems together.

Things moved quickly from there – they had to. Danforth Pewter selected Acumatica by the end of 2014. There was a six month planning and implementation window, with target go-live in July 2015. Project crunch time hit in July. First up: move to Fusion POS on July 5th. Kleppner:

Midnight on Saturday, July 4th, we stopped using our old system. Fusion came up for all six of our stores Sunday morning, and it ran fine that day. The day closed smooth as silk.

Next up: the Acumatica go-live. There were some integration issues to deal with involving customer order numbers, including web-based orders. Fusion POS stepped in, with know-how on customer orders beyond the POS function, winning Kleppner’s “above and beyond” kudos. After a couple of days, Acumatica was running well, and no business was lost.

October loomed – that meant a huge mailing of holiday catalogs. The catalog-website integration with Acumatica had to be complete. Go-live happened on time. It wasn’t perfect, but it was good enough for prime time, or as Kleppner says, “We hit all the deadlines. We had it working to the point where we could function.” After that final integration, Danforth Pewter’s main systems were running on Acumatica.

Fast forward to February 2016: I wanted to know what benefits Kleppner had seen to date. Kleppner’s first criteria: avoid downtime and disaster. Relying on the woman he calls “The VP of Everything,” Beth Morrissey, Danforth Pewter did everything they could think of to make the launch smooth, including redoing their item numbers and general ledger. “I think that paid off,” Kleppner reflects. Looming in the background were the specter of IT failures, of which Vermont businesses are all-too-familiar:

Neither of us knows anything about deploying an IT system. All we knew was that more than half of ERP deployments fail. We all have friends and colleagues who’ve had disasters. This is in the context of Vermont’s online health insurance exchange. I mean, hundreds of millions of dollars of overrun and nothing works, and it’s a complete disaster, right? That’s in the background, and we’re going, “Oh my God, we’re going to end up like those guys.”
But we didn’t have a disaster. We launched on time; the project came in right around budget, and we did not have a disaster. Those three things make it a huge home run.

Assessing the results

Eventually, Kleppner expects 90 percent of employees to have contact with the Acumatica system. Half of in-store employees use the point of sale; the customer service team, which expands up to ten in the holiday season, now puts orders straight into Acumatica. Finance and purchasing are on Acumatica constantly now.

Given some employees had been using the old system for twenty years, it’s no surprise they were concerned about the change. I asked Kleppner how he addressed that. He took the transparent route:

I said, “Look, we don’t have a choice. We got to go to something new. You’re going to be learning a new system either way, because if we upgrade, it’s still going to be really different… From everything we’ve seen, the Acumatica interface is pretty easy to learn. It’s pretty easy to use. You’ll have training and so forth.”

And the response, once users got onto the system? Kleppner:

It worked. I don’t think there’s anyone who thinks we made a big mistake. A lot of them are enthusiastic about it, saying, “Oh, this is so much easier than the old system.” There’s a basic amount of turnover among retail associates. Our store manager said, “Fusion is a lot easier to train new people on. They pick it up.” You get a win like that, it makes whatever we change next, that much easier.

Many benefits of an integrated system are still to come. But some brute force administrative labor has already been eliminated, simply with an integrated POS and ERP:

Because our old systems didn’t talk to each other, that meant a painful amount of double work, and just work period. Want to add a new product? You had to set it up in both systems. And if you wanted a a sales report, you had to take the retail sales out of one system and the e-commerce sales out of the other, and manually combine them on a spreadsheet. If you want to do that for 2,000 SKUs, you’ve got a lot of work.

This quote from Kleppner jumped out:

That’s a huge time savings to our VP of everything, who had to do all of that work. Having all that automated will allow her to do more higher value-added stuff that hasn’t been done, just because there was so much manual work in the past.

Which led to this exchange:

Jon Reed: Instead of busting our ass to prepare the reports, you can spend time actually generating the report and looking at what it means.

Bram Kleppner: Yes – exactly. That’s an obvious and immediate benefit to us.

The (quick) wrap – retail is changing fast

For Kleppner and his team and Danforth Pewter, the timing couldn’t be better. Online sales are growing, but the need to work storefront and online into a coherent plan that stands up to the Amazonian behemoths is crucial.

By the time you read this, Kleppner should be done with his final year-end close from multiple systems. Next year it will be all pulled from Acumatica. For Kleppner, that means more time to gear Danforth Pewter towards retail’s uncertain futures.

Image credit - Image of Danforth Pewter used by permission from the company website, image of Kleppner originally appeared in The Addison Independent, also used by permission of Kleppner.

Disclosure - Acumatica covered the bulk of my travel expenses to cover Acumatica Summit 2016, and is a diginomica partner as of this writing.