Customer Success Stories Successful ERP Implementation - Envent Engineering
Oil and Gas Analyzer Maker Envent Quadruples, Taps Acumatica Manufacturing ERP to Support Fast Growth
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Acumatica Cloud ERP solution for Envent Engineering
Headquarters
Calgary, Alberta; with operations in
Houston, TX, and offices in Mexico City,
Mexico; Mumbai, India; and Beijing, China
Industry
Manufacturing

Envent Engineering

  • Implemented a single, connected, modern ERP tailored to manufacturing operations
  • Gained real-time visibility into operations for the first time in 20 years, improving profitability
  • Quadrupled manufacturing throughput, growing from 2 units to 20 units in a 12-week period
  • Improved inventory transparency, allowing better adjustment of inventory levels
  • Reduced inventory carrying costs by millions of dollars, improving cash flow
  • Gained a modern CRM, improving sales productivity and sales visibility
  • Maintained quality reputation while increasing product availability dramatically
  • Automated manual processes, increasing employee productivity and customer satisfaction
  • Gained multi-currency and multi-tenant functionality, speeding its worldwide expansion
  • Acquired remote access from anywhere, increasing productivity while saving time
Andy Hodgson
"Our adoption of Acumatica was concurrent with our expansion... If we had had all these orders come in without having a better data management system, we probably would have been a train wreck."
Andy Hodgson, Chief Executive Officer
Envent Engineering
Challenges
ERP Solution
Outcome
Challenges

Challenges

CHALLENGES

Based in Calgary, Alberta, Canada, Envent Engineering designs, manufactures, sells, and
services analytical equipment that measures and analyzes levels of hydrogen sulfide, total sulfur,
methane, oxygen, carbon monoxide and moisture, primarily for the oil and natural gas industries.
In addition to its Calgary operations, the 20-year-old company has operations in Houston,
Texas; and offices in Mexico City, Mexico; Mumbai, India; and Beijing, China. Expansion
possibilities include additional offices in Brazil and Dubai.

“We have a good reputation for quality and making robust products that operate in the most
hostile areas of the world where they are not necessarily supervised,” says Andy Hodgson,
Envent Chief Executive Officer, who joined the company three years ago. “They just plug and
play, and customers often run them until they fail.”

“We write our own software. We write our own firmware, and we design and build just about
everything that goes into our analyzers except the enclosure or box that the analyzer goes in,
and the power supply.”

The company earned a stellar reputation and gained a market-leading position because it
makes and delivers high-quality analyzers in 10 to 14 weeks. Because analyzers are mostly
a tertiary product for its competitors, turnaround times for competitors are typically 52 weeks,
Hodgson says. “In addition to the quality of our products, we make a lot of sales because we
can deliver them faster.”

Sulfur analyzers are also known as “grudge buys” since governmental regulatory agencies
require oil and gas companies to have them. “They buy because they have to,” Hodgson says.
Envent’s manufacturing facility has attained ISO 9001:2015 certification and is COR-certified.
The manufacturer was founded by several engineers who operated it leanly with less than 15
employees for its first 15 years. Engineers focused on building a better mousetrap and making it
great. But five years ago, sales took off and the company has more than quadrupled since then.

“We’ve had just unprecedented growth in the last five years, and we’ve almost doubled
every year in terms of gross revenue and staff,” Hodgson says, adding that headcount has
surpassed 100

That fast growth, however, was hard to manage with the manual and rudimentary systems
Envent had in place. Those challenges were magnified when the pandemic hit, and supply
chains were disrupted.

“Just our availability alone gives us a huge market share, but we can only deliver on those
promises by having materials at-hand, having skilled labor at-hand, and having everything we need
in the right quantities at the right time to do proper quality-controlled assembly,” Hodgson says.
Rudimentary Systems

Three years ago, Hodgson was hired to modernize Envent and grow it into a mid-sized
firm. He quickly learned he faced a huge challenge. Like many engineering-led companies,
the executives focused more on building great products not back-office support systems.
Fundamental financial questions like product profit margins or number of units made took a lot
of work to acquire.

When he joined Envent, it had two locations, the headquarters in Calgary and an operation in
Houston, Texas. Each location was run separately, with different legacy accounting packages,
other siloed systems, and tons of spreadsheets and databases.

Procuring materials for manufacturing was rudimentary at best. “It’s almost embarrassing to
talk about,” Hodgson says. “The engineering team would literally stand around and say, ‘Well,
it’s gonna need one of these, and it’s gonna need one of these. And then when it was all built
according to what the engineering team thought it needed, they would do an as-built AutoCAD
drawing of it after-the-fact, and then figured out pricing.”

That’s right; determining actual costs happened after they agreed on a price with the customer.

“We’d have a real moving target of our actual profitability on these systems one by one,” he
says. “The records were so dubious that when someone wants to buy another system, it is
very, very hard to figure out what you sold them the first time.”

They simply relied on best guesses and collective memories in the absence of data. “That’s a
train wreck,” he says.

With mostly manual systems, information was historical and very anecdotal. “It was literally
clipboards hanging on nails on the wall and very primitive,” Hodgson says. “We were surviving
and had a pretty stable market share, but we weren’t growing. What was important was making
the product, not a profit.”

Hodgson’s first order of business was finding a modern financial system that could unite its two
locations, and then modernizing production, which was largely a made-to-order operation akin
to a custom clothes tailor, he says.

“It became very labor intensive to prepare financials for board meetings and quarterly reports,”
he says. “It was pretty much a bunch of spreadsheets, but really the back-of-the-napkin is
probably more accurate.”

Without a CRM, gathering data was difficult at best because each salesperson had their own
cobbled-together systems with data stored on cell phones. “It was quite primitive,” Hodgson
says. “It was very disorganized with very disparate systems. It is actually quite shocking how
this company had succeeded in spite of itself on many levels.”

Production Challenges

Procurement was complex because it took some 1,800 different parts to make an analyzer.
Some items required a six-month lead time, while others were in inventory. Such complexity
was hard to manage manually. When the company received an upswing in orders and started
carrying a backlog, they invested a lot of money in inventory.

“We were probably sitting on over $4 million of inventory and had another $3,000,000 on route at
any point in time in order to address some $8 million worth of booked orders,” Hodgson says.
Without a robust inventory system, “We had an abundance of some things – probably a 10-year
supply of some items and a two-week supply of other things.”

Like others worldwide, Envent encountered supply chain issues during the pandemic, most
importantly with micro-processors, and had to turn to the grey market while also dealing with
scarcity issues and escalating costs. “Items that used to cost $13 started costing $1,300,”
Hodgson says. “Those issues quickly eat into your gross margin rapidly.”

“Everyone knew that we had to do something differently in order to succeed, and so the
appetite was there for a new platform,” Hodgson says. “The appetite was also there with our
younger workforce members. These were the 22-year-old engineers who were appalled at the
kind of banging-rocks-together-to-make-sparks level of technology we were using.”

ERP Solution

ERP Solution

SOLUTION

Envent evaluated SAP’s small business solution, NetSuite, a custom program, and Acumatica
Cloud ERP. Hodgson had used the enterprise edition of SAP at his previous employer, a
competitor to Envent.

The evaluation team eliminated SAP from contention “because of its pure price point.” “It was
just prohibitively expensive for us to entertain,” says Hodgson. “I remember (at his previous
firm) we probably spent 1,000-man hours just trying to populate it and three years later it
was still an incomplete system. Having a mid-size business adhere to what would apply to a
multinational company became really onerous to keep accurate.”

NetSuite was also eliminated from the list. “They are pretty good at selling the dashboards to
executives rather than selling the data entry screens to the people who are going to be working
with it,” Hodgson says.

Envent chose Acumatica Manufacturing Edition for several reasons. “It actually looked good to
everybody from the beginning,” Hodgson says. “Because we run two sets of books, we could
start with two tenants and modify that in the years ahead to one tenant with two branches.”
In addition, Acumatica offered multi-currency functionality, which was critical since Envent has
word wide operations.

“It also works a very well from a P&L, with all the standard balance sheet reporting, and
it exports nicely if you want to do additional analysis in a different format,” Hodgson says.
“NetSuite doesn’t export very nicely.”

Envent also liked Acumatica’s unlimited user pricing, which allowed everyone to work in the
ERP simultaneously, and allowed executives to concentrate on running the company as
opposed to worrying about escalating per-user licensing costs.

Acumatica Manufacturing Edition, Hodgson learned, offered Canadian localization, MRP, bill
of materials and routings, inventory control, order management, as well as financials, project
accounting, and Acumatica’s CRM.

“We landed on Acumatica mostly from an accounting-driven decision and knowing that with a
partner, we could salvage a lot of our data. They could populate it in the right boxes, and we
could work from a point forward rather than spending a whole lot of time populating it from
scratch,” Hodgson says.

He also liked the ERP’s deep functionality from order-to-cash, and the ability to add modules
as Envent needed them. “We can roll it out over time slowly, and on an as-needed basis, so
that probably made the sale better than anything else,” he says.

“Once we had the opportunity to test drive it and to see our data in play, I think the accountants
were the first to be happy and then it kind of went department by department after that.”

Acumatica partner Aqurus Solutions helped Envent deploy Acumatica.

Implementation

Like several Acumatica customers, Envent executives initially chose to run its new ERP
concurrent with its legacy systems.

“Implementation went really well, and it was up and running in a very short period of time,”
Hodgson says. “But we made a caution-based decision to run concurrently for a while. That
doubled the workload and made for an unhappy period. In hindsight, we should have just
proceeded with the leap of faith that Acumatica was going to be adequate and capable of what
we needed it to be.”

Part of that decision stemmed from that knowledge that reviews of Acumatica seemed too good
to be true, he says. “As part of our due diligence, we asked around and were put in contact with
other companies that had gone through the process and they were all so good that they seemed
almost staged,” Hodgson says, adding he’s now one of those avid Acumatica advocates.

“If I were giving an assessment of Acumatica, I’d be hard pressed to say where it didn’t do
something for us,” he says. “I’ve not only have I found it to be everything I thought it would be, but I
found out working with the partner was almost intrinsic to the success of our implementation.”

Outcome

Outcome

BENEFITS

Real-Time Data Improves Visibility

“Our adoption of Acumatica was concurrent with our expansion and growth,” Hodgson says.

“I would be the first to say that it probably made a lot of the growth possible. If we had had all
these orders come in without having a better data management system, we probably would
have been a train wreck.”

Acumatica provides access to real-time data, which Envent didn’t have previously. “What we
have is near instantaneous data reflected in real time, which is wonderful to see as sales are
made,” he says. That’s particularly important for traveling salespeople and executives.

“There are a number of us that are open somewhere on planet Earth around the clock, so realtime information is critical to us. And it’s not batch processing; it’s real-time data processing.”

Creating financial reports is easier and takes less time. Previously, Hodgson requested
information from others three days before he needed it to create reports for an upcoming board
meeting. He often had to bug his team to get their data to him. Now, Hodgson accesses data
by himself whenever he needs it, which has saved him and others days of data collecting.

“Acumatica is always available around the clock, and it’s cloud-based, which is an enormous
advantage,” he says. “I do all of my regular reporting and examination of the numbers
from wherever I am, and it’s quite often in airports. I’ve got the perfect snapshot for all the
information I need to do my job.”

Previously, his reports contained historical data and was “dubious,” he says. “It usually took a
couple of weeks, and we would have a board meeting a month after a fiscal quarter just so that
we had fairly reasonable closed numbers to talk about.”

Trying to factor in currency exchange rates at the time the numbers were produced was a
headache. “That time lag was very hurtful and led to providing misleading information,” he says.

Quadrupled Manufacturing Production Capacity

Thanks to Acumatica, Envent executives have increased its manufacturing throughput, and
now the company makes four times the number of analyzers in a single year.

“We now do as much in a fiscal quarter that we used to do in a year,” Hodgson says. “Our
production capacity is four or five times the size that it was two years ago.”

“If we were shipping two analyzers a week and it was a 12-week order fulfillment, that same
12-week order fulfillment stayed the same, but we’re putting out 20 analyzers after the
adoption of Acumatica. The actual time to build any analyzer is roughly the same, but it’s how
many of them we can build concurrently that changed.”

Event could not accept orders over a certain amount in a 12-week production run in the past,
Hodgson says. “Getting international orders for 30 to 40 analyzers at a time with very short
turnarounds, we wouldn’t in our wildest dreams accepted an order like that three years ago.”

Most importantly, Envent knows what it costs to build each item and what its profit margin
is, which is information executives didn’t have previously. Suffice to say, the company has
increased its profitability.

“Just from efficiency alone, we’re more profitable,” Hodgson says. “We buy the proper
materials and know what they cost. We also know how many times a year we can convert cash
to inventory back to cash again.”

Given the length of time it takes to build items, Envent’s cash to inventory rate is 3.5 times a year.

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