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Implementing partial, or "light," versions of an ERP system can be a good way for manufacturers to get needed features for a low price. The cost of eventually upgrading to a full system, however, can leave a sour taste in the mouth of even the most eager users. When Denver-based Hammond's Candies, a maker of chocolates and hard candies, came to this crossroad with Microsoft Dynamics, it switched to Sage ERP instead.
Hammond's used Microsoft Dynamics GP until 2013, when the company purchased Old Dominion Peanut Co. in Norfolk, Virginia. Old Dominion was already using Sage for its ERP system, and the software caught the eye of the Hammond's home office, according to CFO Ralph Nafziger.
When Hammond's bought Microsoft Dynamics GP in 2004, the company was desperate for a standardized ERP system, juggling 3,000 accounts on only Intuit QuickBooks software, Nafziger said. Microsoft had just cut the cost of GP licenses, so Hammond's jumped to adopt the light version of the system. But when the company wanted to move to the full version of GP, Nafziger was "discouraged" to learn that Microsoft wanted about $30,000 for the move. The price tag ultimately pushed Hammond's away from Microsoft and to Sage.
"Sage was more expensive [than Microsoft Dynamics GP] to begin with, but didn't have those significant, prohibitive upgrade costs," Nafziger said.
Moving from Microsoft Dynamics to Sage ERP
The Sage ERP software was also particularly attractive to Hammond's because of its robust cost-accounting capabilities. The company has been working to move from the "hodgepodge" accounting system that Nafziger himself built years ago to a more stable model. The Sage cost accounting module has been partially implemented, and the company plans to be using it fully by year's end.
While the company is now using Sage for its daily ERP needs, Hammond's still accesses Microsoft GP occasionally to read inactive customer master files from before the Sage implementation, as well as invoices and inventory transactions that were closed out before the switch.
Nafziger describes the move from Microsoft GP to Sage as one of the easiest data conversions he has taken part in. "I've been around awhile, and I've done conversions that involved a lot of work," he said. "What made this one easier was the support given by Sage provider, Stewart Technologies, out of Maryland. And Sage itself stands behind its providers, like Stewart, in ways that Microsoft never did."
More licenses sweetens deal for users
When making the switch from Microsoft to Sage, Nafziger and his team were relieved to find no resistance from employees over learning a new system. One thing that helped with the transition was the number of seats available for users with Sage, he said.
"Microsoft, in enticing you to move from the light to the full version, really put customers like us in a bad way," Nafziger added. Under the light Dynamics GP, the company was allotted a maximum of 10 seats.
"We were so constrained by Microsoft that I'd get hundreds of emails a day from employees that needed to wait for someone to get off the system before they could get on," he said. With Sage, Hammond's now has 18 seats and growing.
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Today, Hammond's uses Sage primarily for order entry and keeping track of shipments on their way to customers of all sizes, from wholesale to mom-and-pop stores. Sage is also being used for inventory management, accounts receivable, accounts payable, purchase orders, vendor management and invoicing, according to Nafziger. Most recently, Hammond's added Sage's general ledger module.
Among the main benefits of the switch to Sage have been faster analysis of open orders and easier access to data on those orders, Nafziger said. It's also much simpler to find information on inventory levels than it was in Dynamics GP. "The system is much more user-friendly now," he said.
Hammond's is currently using Sage 100 Advanced -- formerly known as Sage MAS 200 -- and plans to upgrade to Sage 100 this month, according to Nafziger.
In the future, Nafziger would like Sage to better accommodate additions to the master file, without cost changes automatically being made that could lead to inaccuracies. "Right now, each month, I have to go in and manually back up the dollar amounts for each unit," he said. He expects that this problem will resolve itself once Hammond's is fully off its in-house custom system and onto Sage for bills of materials.
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