The Liquid Lunch Project: Upgrade or Die: Timing Your Move to Better Business Tech
Luigi Rosabianca:
Ryan, I'd love to take this opportunity to ask you a question about Microsoft itself. As a partner with them for 20 years, you probably have some really interesting insights. What is it about that company's resiliency that makes them such a force even 30, 40 years after their start? I mean, Lord knows they've called the priest to give last rites to this company a couple of times, and by the time the priest shows up somewhat at Microsoft is doing wheelies, what the wheelchair. I mean what is it about this company that makes them, I don't even think resiliency is the right word, they evolve. They're a different company today than they were years ago. What can we take away from Microsoft as small business owners?
Ryan Pollyniak:
Yeah. I've seen one of those last rites being read in my tenure here as some of those old Microsoft Dynamics applications had really beyond aged themselves out.
Speaker 3:
Welcome to the Liquid Lunch Project. Going from Wall Street to Main Street to help small business owners have the same capital as corporate America, and give them the same resources as a larger company. We cover business funding, business credit, scaling, business consulting, and much more. Check out the website at shieldadvisorygroup.com. Welcome to the show, the Liquid Lunch Project.
Matthew Meehan:
Hey. What's up everybody? Welcome back to another episode of the Liquid Lunch Project. I am Matthew Meehan and I'm with my partner, the professor, Luigi Rosabianca. What's on tap today, Lui?
Luigi Rosabianca:
Matt, we got a good one, buddy. If you are a small to medium-sized business owner and you're contemplating evolving with the technological flow today, cloud-based AI, CRMs, ERPs, it's like climbing Mount Everest. It is a heavy, heavy lift. So today, we have the technological Sherpa to guide us and maneuver this huge landscape. Welcome to the podcast, Ryan Pollyniak. Ryan, let's be the technological glossary. Walk our audience through what an ERP is and how Western Computer can partner with Microsoft Dynamics and implementing these critical, critical tools in growing your business in 2024.
Ryan Pollyniak:
Lui, thanks for having me on. Absolutely glad to talk through that. So Western Computer, we implement Microsoft Dynamics and Microsoft's got a suite of tools for all different types of business. So as a small business grows, very commonly the conversation becomes how do we get out of managing our finances in Excel or in a QuickBooks or in something like we need to make the next jump to the next level of solution to gain some auditability and some control over our business and future growth. Of course, with something like a CRM. So Microsoft Dynamics has an application that for the SMB market, the small, medium-sized business market. So there's an ERP application there, and what ERP is, it's typically it stands for Enterprise Resource Planning. What it really means is running your business from an accounting standpoint, an inventory management standpoint, warehousing, manufacturing, even discrete manufacturing, service management, project accounting.
So making sure to generate your financial statements and have secure data and have a platform for growth as your business grows. That ERP side of it is more than nuts and bolts of the organization. Then you've got CRM, and CRM means different things to different people, but at the end of the day, it stands for customer relationship management. How do you engage with your customers? And whether that's a service-related enterprise or whether it's a call center with people calling in with requests for help from a help desk or traditional CRM is growing your business, bringing in leads and nurturing them through the process and creating opportunities and accounts and managing a sales pipeline. Very difficult to do that as a small business.
And CRM, I always say provides going from zero to a CRM provides such an immense return, especially for a young organization. Whereas the longer you go with that, you tend to get processes ingrained where salespeople are keeping their own notebooks and Excel sheets and you have no aggregation of your potential sales pipeline, and then somebody leaves and takes it with them. So standardizing that at an early stage on a simple level, I would recommend crawl, walk, run, very important as well. So those are the two main things that Microsoft offers companies listening listening to this podcast
Luigi Rosabianca:
Now, Ryan, why Microsoft? In a landscape littered with NetSuite and SAP and et cetera, et cetera, et cetera, why Microsoft Dynamics? What's your competitive advantage? What's your leverage?
Ryan Pollyniak:
Sure, yeah. I mean, for starters, the backing of one of the biggest technology companies on the planet. So Microsoft, they host these applications on their own Azure infrastructure. So without going too deep, the days of needing servers are gone. The days of managing servers and SQL and VPN so your people can connect remotely, that's all gone and that's pretty standard across some of the applications you just mentioned. The differences in Microsoft, they own their own house, so to speak. They're hosting their applications and their own back end. They provide industry-leading cybersecurity. World-class cybersecurity and protection of data would be the number one thing that I'm thinking about as a business owner who is on an on-premise system, some server that you've got internally because ransomware is rampant and we've seen it happen. It's always on-premise system.
So Microsoft's Advantage is in being able to secure and offer reliability in terms of uptime. They own this stuff and they keep it going. They are the de facto industry leader in AI. Big partner with OpenAI. Microsoft of course does a tremendous amount with artificial intelligence, which yeah, we're on the leading edge of that type of thing. And Microsoft is developing concrete use cases for how AI is going to help their companies that use this software. And then integration to the tools that everybody uses is very high on the list. Most companies that I speak to are using Office, Excel, Teams, Word, SharePoint, all of these tools, Outlook, have native integration to the Dynamics 365 stack of applications. And that goes a long way. And I would say that technological advantage, in terms of the infrastructure and the security and the breadth and the scale of Microsoft's Technology Foundation, and then look integration to office. I mean everybody uses this stuff. You want application that's going to talk to those applications that you're using already.
Luigi Rosabianca:
Ryan, I think you hit the magic word earlier when you said integration. I mean, what good is having a shiny new red Ferrari if you don't know how to drive it. So how does your team help the SMB space integrate these tools that if they're not integrated are basically useless?
Ryan Pollyniak:
Great question. So we've been doing this a long time. Western Computer's been implementing Dynamics for over 20 years. That's all we do. We have worked with so many young companies who are growing and they're outgrowing the tools that they have. And this could be a big... Like you mentioned in the beginning, just trying to wrap your head around what to do. And I love your Sherpa analogy, I've used that myself. You need a guide. So what we do is we start with conversations that are very open about what is your organization trying to do and do we have a fit? Because we've walked away from many companies who are trying to do things that are not in the wheelhouse of Microsoft or even our organization because at the end of the day, we want to get engaged with projects we could be successful at and that are a good fit.
So what we do is we walk through requirements. What is your business trying to do? Not just today. I've got three little girls and I wouldn't buy them shoes that are right up to the toes. You got to get something that's a little bigger. You want to grow into it. What's your growth strategy, and then what is your internal team comprised of? How open are they to change? Maybe you've got someone in the back office that's been using X, Y, or Z system or writing things on paper in Excel for 15 years and there's some aversion there.
So understanding what the organization is all about, and then we create a plan. It is, okay, which application is going to fit? Which modules do we need to implement? How are we going to train this customer and make sure that their users adopt the application based on best practices? Meaning that there are hundreds of thousands of companies out there that use Microsoft Dynamics. There've been quite a lot of lessons learned over the years and making sure that we help people understand how the application is supposed to be used, that's a big help because then you're not customizing it and you're not building something that mirrors what you've had in the past. You want to use it for what it's there for.
So all of those things, providing executive sponsorship. Along the way, our leaders get very involved and stay in contact with the executives of customers. And drawing on experience is important. If you go to westercomputer.com, let's say you're on QuickBooks, which is a phenomenal early business application for a startup, you will outgrow it. You need something at some point that's a little bit bigger gap-compliant, more robust. We've got a lot of success stories and guides on how to migrate two dynamics from that. Go ahead, Lui.
Luigi Rosabianca:
Let's use this instance to assist the audience in recognizing when to grow. Setting aside revenue, over the 20 years of experience. Have you come up with some rule of thumb as to when that growth indicator light is blinking? When does a company transition from QBO to Microsoft Dynamics and when is too early? Because there's certain costs and overhead expenses and just the breadth of integration, but you also want to grow. So how do you recognize when that shoe is a bit too tight?
Ryan Pollyniak:
Yeah, sure. In general, you want to anticipate when your company is going to grow because you don't want to be caught flat-footed. What I mean by that is it can't be, "Hey, we've got this major growth factor that's coming next month. Let's switch to a new ERP." And we've heard that, "Hey, we'd like to be live in 45 days." It's not realistic guys. These are enterprise business applications. And I use that term, define it how you want, but a better word is gap-compliant, generally accepted accounting principles, compliant systems, they take setup, they take training, they take data migration. You need to leave yourself six months, at a minimum, to make that transition.
So if you've got a big growth driver in the future, maybe you're going to acquire a company and each company's different. Maybe you've got some organic growth, new product that's taking off and you foresee that on the horizon, we're going to need something bigger and better, start that process earlier. Because it takes time, not only to pick a product, to pick an implementation vendor, but then to contract and to negotiate that contract, and then for your vendor to source a team. These are all chunks of time as you lead up to it. And then the project itself. So what I would say is that you have to take into account busyness internally as well. Nobody will be able to implement a Dynamics 365, you mentioned a NetSuite, you mentioned Sage, SAP, purely for you without any internal help. Your people have to help. You need bandwidth internally.
So I would say, you've got to time it with in line with when you're going to have some internal bandwidth for your people to support the implementation as well. I don't know if there's a magic bullet in terms of an indicator of, okay, now we're ready to go pull the ERP trigger. Every company's just so different. But I would just caution to leave plenty of time for evaluation and implementation. You'll probably if you're going to go back all the way to the evaluation stage, probably give yourself a year, six months for the project, six months for evaluation, and you'll be better set up for success there.
Matthew Meehan:
So making a decision to just pick what software platform or ERP to use is the big decision. Because I can tell you from us doing it internally, we made the wrong decision multiple times. And it's not 45 days, it's 6 months and more money and 6 months and more money and the whole process again. So help the audience understand what they should be looking for as they make the decision to go with Microsoft Dynamics or SAP or another competitor out there of yours?
Ryan Pollyniak:
Yeah. That's an awesome question. So it does depend on the type of business because some industries are very industry specific, and so the tendency is to say, okay, pallet manufacturers, for instance, I'm working with one right now and they have very unique business needs. So these companies have to decide, "Okay. Do I want a pallet manufacturing software that does every single thing I want it to from a feature standpoint, or do I want something that is rock solid with a Microsoft foundation, integrates to everything I have flexible, configurable, and maybe I need to do without a few features or build a few features into it because it's not meant for the palette industry, but it is from a foundational level much more solid?" So if I'm in a specific industry like that, that's a really good thing that you need to weigh right out of the gate.
And I would caution, I think there's a tendency to just look at features typically, and that could be a real pitfall because maybe Joe's palette software is managed just by Joe, and he and his cousin are the whole company. There's a big business risk to that because if that company goes away or they decide to do something else, there's not that backing there where it's going to have continuity and guarantee that it's going to be around. Something like Microsoft Dynamics, if you go implement it, there are hundreds of partners worldwide that will work with you on it. You've got Microsoft developing this thing, so that really lowers the risk. If you don't like the partner you're working with, you go find a new one. So I would say that's one pitfall. Let's not look at all at just the features.
Beyond that, match it to your tech stack. If you're a Microsoft shop, there's going to be a lot of reasons to go look at a Microsoft product. If you're a Google shop, maybe not so much. I would say that what I see with companies that run Google on the business productivity side rather than office, that's typically very common for small businesses. As businesses grow, they tend to want to shift to office for a variety of reasons. And sometimes there's a point where that becomes almost too late because all those processes get so ingrained with the Google Docs and the Gmail and things like that.
I know of one big enterprise that you guys would all know, I'm not going to say them by name, that we implemented when they were $20 million in annual revenue when we started the implementation. 9 months later when we finished, they were on track for 200 million. Fast growth, and they went down that road. They had half their, and still today, this company has half their people using Google and half their people using Office, and it's a mess. If you're going to look at that transition, do it early because you want to grow up on the business productivity software suite that you're going to use long term.
Matthew Meehan:
Let's take a step back for a second and just to talk on what you said about features. Sometimes I want nothing but what I need to do. Don't show me all these bells and whistles because you just make my life more complicated.
Ryan Pollyniak:
Sure.
Matthew Meehan:
So I think the features are pretty most of the time, and they're exciting and they get you to sign on, but I'm never going to use this at the end of the day when it really comes down to it. But also going back to what you said is yeah, I also believe most businesses start out on Google or something like that because it's just easy to integrate and it's cheap. With that being said, where does the price point start with ERP at Microsoft Dynamics 365?
Ryan Pollyniak:
Yeah. So you're going to find different answers for this if you ask different people. We are passionate about reality. If you want to do Business Central, and you're a financial organization, you're going to start at 60 or $70,000 for an implementation. Industry benchmarks will tell you that you should spend about 1% of your annual revenue on an ERP deployment. So if you're going to spend $60,000, you could do the math there in terms of what you should be doing, and from a business standpoint, what does that work out to? $6 million a year in annual revenue. That's the financial side of it.
Now, there are variables. If you need to go integrate to third-party systems, which is very common these days. Companies have built proprietary systems or they have external systems that they want to integrate to, that will increase your budget, that will increase your timeline. If you want to go implement the operational side, like let's manage our inventory and do picks and putaways in the warehouse, or let's manage our manufacturing process, project accounting. Business Central does all of those things. And you start to each module you do, you need consulting for requirements analysis, solution design, configuration testing, whatever product you pick, that's probably the most important internal thing that your organization needs to be prepared to do is test and test and test before you go live training, go live, support, all those things.
So as you add on inventory and manufacturing, Business Central can continue to increase in an implementation cost. But bottom line in terms of saying, "Hey, if I even want to think about doing this for my financials DL, APAR," be ready to spend 60 or $70,000 to do it because there will be people out there that'll tell you less, and then you get into the project and to use a euphemism once you're pregnant, you're having the baby. And then they're saying, "Hey, we need twice of that." So don't fall into that trap, be ready to spend that much.
Matthew Meehan:
And then I'm assuming there's ongoing costs for keeping your company on as co consulting with you for things when things go wrong and things go down too. What would those consultant fees look like?
Ryan Pollyniak:
Yeah, absolutely. Microsoft and nor will NetSuite or any other ERP provider support the application long-term without having to pay for it. That all happens through the partner channel. So typically it's either time and materials like pay for what you need by the hour, or manage support services. And one thing we didn't talk about in terms of cost, which I want to back up because it's tied to this. Business Central is very affordable from a licensing standpoint. So you take that 60 or 70 grand I mentioned, and typically we see organizations capitalize that expense over 3, 5, 7, 10 years. And then it's, "Well, how much am I paying per month for the application?" Business Central is $70 per user per month unless you need manufacturing, for service and then it's 100. That's really cheap guys. You have 10 users, you're all in $700 a month hosted, secured. That includes upgrades, that includes everything that you need.
So we have a managed services offering, managed support services. After the project, you pay half of your monthly license costs, so in that scenario, $350 a month, which is an hour and a half of consulting with standard market rates, and you get unlimited tech support, you get upgrade management, you get feature advisory and all the things that Microsoft pours into the application. So there is a cost, and we at Western Computer developed that managed support services offering because we had customers asking for it, and we don't want this variability. Tell me how much it's going to cost to support this per month. Let me plan on it. And then it's no problem. And given the low license cost and ongoing subscription cost of Business Central, that managed support services offering has really taken off and it's made for happy customers more than anything.
Matthew Meehan:
So we spoke about CRMs, we spoke about ERPs. These have been around for a while now, but just starting to get shaken up and it's been changing with AI. Microsoft has a very good relationship with open AI. So what do you see on the forefront for Microsoft Dynamics 365 with either open AI or some agents that Microsoft developed and how could that be used for the small business owner?
Ryan Pollyniak:
Yeah, man, awesome question. So there's so much out there on what Microsoft is doing across all of their applications with AI. So things like cashflow management. Traditionally, that's been, "Okay. I've got all these invoices out there. Some of them are in a 30 day aging bucket, some are net 60, some are net 90, you got, let's use that to just cross our fingers and hope customers pay at these times, and that's how we're going to do our cashflow." Now, AI can look at that stuff for you and say, "Okay. How has A, B, C corporation's customers, how have the actual customers actually paid over the last year or two years?" And maybe they've paid on average customer A's paid nine days early and customer B's paid 17 days late, and customer C let's things go into default, and it will build a real cashflow for you now based on actual data for your actual people and how they've actually behaved.
Now, that's more of a data-driven AI, which takes a little bit of time to build up as opposed to a tactical type AI, which is more, "Hey, I need an answer to a question right now, so let me go ask know Copilot how to do something." So for instance, in the chat, in the help, you can go ask it a question and it'll give you really good context and links. You can have it suggest if you've got an e-commerce shop, look at an item and suggest a description based on the picture, things like that. And here's the reality of AI. It is absolutely cutting edge. It's very new. So the most important thing, I would say, is to be ready to get into AI based on which application you're using.
So you're not going to be able to really take advantage of AI if you've got an old application, if you've got something sitting on a server on your backend. This is not going to be somewhere where you can take advantage of the modern tools. Nobody fully understands what's coming out with AI yet. Microsoft is doing a great job of preparing customers to be ready for AI, no question about that. And they've got concrete use cases, like I mentioned, routing things for approval, like, "Hey, I'm getting a vendor invoice in." Whereas now I've got somebody in my AP department typing it in into the system and then attaching it to an email and sending it to someone for approval. AI in Business Central and other Dynamics applications can take that in, route it intelligently and actually fill out your payable transaction for you based on the data on the document, and then send it to the appropriate people for approval. So those are just a few high level examples of the things that it can do.
My main recommendation would be nobody knows where AI is going in a year, two years, three years. That goes back to Joe's Palette software, and that doesn't really exist. I'm making that name up. And does he have an AI vision. Or do you need to tie yourself to a program that's got a much more robust foundational technological foundation so that you're ready to take advantage of all the great things that are coming down the track? So that stuff is emerging. It's in use now. Some of this, if you want to look at Microsoft's, Copilot program, Copilot for Business Central Copilot for Power BI, Copilot for Dynamics 365 sales, which is the CRM application. There's a ton of concrete use cases there now, but you're also setting yourself up for the future to take advantage of all the great things that are going to be done. Go ahead, Lui.
Luigi Rosabianca:
Ryan, I'd love to take this opportunity to ask you a question about Microsoft itself. As a partner with them for 20 years, you probably have some really interesting insights. What is it about that company's resiliency that makes them such a force even 30, 40 years after their start? I mean, Lord knows they've called the priest to give less rights to this company a couple of times, and by the time the priest shows up, someone at Microsoft is doing wheelies with the wheelchair. I mean, what is it about this company that makes them, I don't even think resiliency is the right word, they evolve. They're a different company today than they were years ago. What can we take away from Microsoft as small business owners?
Ryan Pollyniak:
Yeah. I've seen one of those last rights being read in my tenure here as some of those old Microsoft Dynamics applications had really beyond aged themselves out. Let's be honest, NetSuite was born in the cloud and was trouncing Microsoft Dynamics for a period of time when it first came out. Salesforce was the same way. These applications gobble up a ton of market share. So I think the change came at the top. When Satya Nadella took over as CEO of Microsoft, he immediately said, "Guys, we've got to modernize. We've got to take advantage of all of these market advantages we have." The things that I mentioned. We own our own infrastructure. We own our own Office 365 stack. He totally revolutionized what we were doing with Dynamics and put focus on it in terms of a future growth for Microsoft. They're all in on it.
They're going gangbusters on R&D for Business Central, for Dynamics 365, sales, customer engagement, the CRM side, and for finance and supply chain management, the enterprise application that they have. And that was driven from the top. And I think it comes down to flexibility based on their market advantages, leadership from the top, and then a world-class partner channel that can't be touched. There are so many independent companies that you can work with out there that can drive success. And I think it's wise for Microsoft to stay out of it, whereas some of the other providers become intimately involved.
And what ends up happening sometimes, just transparently is, some of these other providers, they're very interested in selling the license, which I totally understand. Microsoft is too, but Microsoft's not the one running the sales cycle in our case. And they rely on their partners to be very open and transparent and consultative during the sales process where I've seen other companies be very high pressure, buy the license, buy the license, sign a long-term contract. Okay, great. Now I'll link you up with a partner, who's actually going to make it happen, whether or not reality has been transferred and expectations have been properly set is a mixed bag sometimes. So I think the partner channel is a huge part of Microsoft's flexibility and success as well.
Luigi Rosabianca:
So how did a nice guy from Georgia end up in the Microsoft Dynamic space?
Ryan Pollyniak:
Well, I went to the University of Georgia and worked for ADP out of college, worked for their little known ERP division that was spun off many, many, many years ago. And-
Luigi Rosabianca:
ADP had an ERP division?
Ryan Pollyniak:
They did, yeah, absolutely. Very specific industry targeted towards car dealerships, so not the Toyota or the Honda corporate, but car dealership, rooftops to run service and sales and finance. So yes, that was ADP dealer services headquartered, where I am from Georgia, and my region was anyway, and they spun that division off and focused on employer services payroll, which is what everybody knows them for. But in that training and jumping into that job, which admittedly out of college, I majored in business administration and had designs on going to do an MBA, which never happened. That may happen one day. But I fell into the ADP job through a networking opportunity, through someone I knew. So many things in life, when you're that age, something happens, you meet somebody and you get steered into a certain business. Well, I gravitated towards it. Working with dealership owners who would tell us how we revolutionize their business and put it in a case study and sing our praises after spending all kinds of money. That's a good feeling. And helping people grow and prosper is a great feeling. So I got hooked on that.
So after ADP, I moved into the Microsoft Dynamics world working for an add-on provider, actually working with partners like Western Computer to complement the functionality of Dynamics. And I've been here ever since. It's been 17 years at this point, which is hard to believe, but it's still, at the end of the day, it's helping people out. It's giving people honest opinions and turning people away when we're not the right fit and saying, "Hey, I think you should go look at X, Y, or Z, and here's why." There's plenty of good business out there. And if you focus on what you do well and treat people the right way, which is what we try to do and what I personally try to do. So that's my short story of how I ended up here. And I'm hooked, man. I'm here for life.
Matthew Meehan:
Ryan, thank you so much for being here. We want to be respectful of your time. Can you tell everybody where they can find Western Computers and get in touch with you if they have any questions?
Ryan Pollyniak:
Yeah, absolutely. So westercomputer.com, it's got a tremendous amount of content there that you can either register for live webinars or look at our recorded webinars. You go into the search bar and type away QuickBooks or NetSuite comparison. If you're evaluating various applications, you're going to find a wealth of information there. Me personally, I'm on LinkedIn. You will not find another Ryan Pollyniak, I don't think anywhere. So it's pretty easy to find me. It's MSDYN Solutions is my LinkedIn URL, but you can just Google my name. More than happy to have a conversation, guys. I love what I do and I love talking to people and pull the link down what the options are. So if anybody wants to reach out on LinkedIn, feel free to do that, and I'm glad to have a conversation with you or look, you go through our website, you fill out the Contact Us form. We have an amazing team, full of great people who are all stars in this business, and one way or another we'll get you taken care of.
Matthew Meehan:
Ryan, thank you so much for being here. I have one question before I let you run.
Ryan Pollyniak:
Okay.
Matthew Meehan:
Apple or Android?
Ryan Pollyniak:
Android, for me. I fell into that one too. We use Google and Gmail and YouTube and all that stuff. So look, I don't want to sign up for another Apple ID or whatever it is and have everything synced up. Google's already got all my stuff, so I'll just leave it there.
Matthew Meehan:
Yeah. Sometimes it's just ease of use, and I think that's why Microsoft Dynamics could be a system for everybody because especially the fact that most people's data that I know, especially small businesses, it's very fragmented. They can centralize that data where AI is going, will help forward. Ryan, thank you so much. That's a wrap on the Liquid Lunch Project.
Ryan Pollyniak:
Well, thanks for having me. All right.
Speaker 3:
Thank you for listening to the show and make sure you subscribe, leave a review and share it with the friend. We'll see you on the next episode of the Liquid Lunch Project.