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Choosing business software - points to consider

Deciding which software system to use can be daunting. Alan Hamilton offers some advice on finding a supplier.

Greater efficiency, closer control over the business, improved accuracy, better margins, reduced stockholding, enlightened reporting – all benefits a wholesaler will probably be looking to enjoy from the implementation of new business software. But how can he or she make sure the system chosen will deliver all of the above?

Opting for the wrong one will certainly be an expensive mistake and a waste of valuable management time.

Today, software is one of the most important business tools for a wholesaler. Without it, it will be almost impossible for anyone, apart from the very smallest players, to keep track and manage the thousands of products and the complex customer pricing arrangements which are essential to remain competitive in the marketplace.

So how should a wholesaler start the search? It certainly won’t be difficult to find a selection of suppliers for consideration as most advertise their systems in the trade press and use direct mail as a means of promoting the benefits of their individual systems. But it will save time if some important decisions can be made before these suppliers are invited to demonstrate their systems.

Considering the advantages and disadvantages of the technology platform on which any software is built is a good starting point and will enable a large slice of the contenders to be discarded at an early stage. Every computer has an operating system (OS): this is the suite of programs that makes all your computer hardware and software work. A key decision here will therefore be the choice between software that is based on a traditional character-based operating system (such as Unix) or one based on Microsoft Windows.

Much of the software in the industry has been around for many years and probably around 75% of systems used by wholesalers today are based on Unix-style systems. They were developed before Microsoft Windows became a standard operating system, but are often fast and reliable. However, the downside is that as new staff arrive, having used Windows-based systems for many years at school or college or on their PC at home, they have to learn to use these older systems with their green screens rather than the familiar point-and-click devices and graphical interface of Windows.

Tasks such as entering orders tend to be easier with a graphical-based system as you can move around the screen in the order that suits you, rather than having to tab through fields in a pre-determined order. A Windows or Apple Mac based system will also be totally compatible with most Microsoft programs so you can easily send data to Microsoft Access and Excel for further analysis.

Finding out if a system uses non-proprietary technology for its report writing (for example a widely used product such as Crystal Reports) and databases may also be an important factor to consider. Microsoft’s SQL Server is the database technology adopted by most modern software developers, and is widely understood by the majority of IT professionals. Every town of any size will have many companies who can develop reports using products such as Crystal Reports, from an SQL Server database, allowing you to be less dependent upon the original supplier.

This competition reduces the chances of being locked into a supplier that might abuse their position in future years.

What about a software supplier’s understanding of your business? An in-depth knowledge of how wholesalers operate is crucial before any software can have the functionality to do what you want it to. For example, will it integrate with the widely-adopted pricing database for the electrical industry maintained by Luckins? What is its stock control function like and can it handle high value stock efficiently? Some systems can show individual cable drums on screen, and how much cable is left on each, which enables the user to pick orders in the most cost effective manner. Will the software handle specials and automatically create a purchase order for back-to-back items? Will it convert quotes to orders to save time? Can it handle kits? Does it work out rebates? Will it suggest prices to your sales staff to help them achieve the margin you want – and warn them whenever they are about to sell something too cheaply? These are all important functions which some systems take in their stride but others simply don’t offer.

Another important function to consider is how your software displays important management information. Some systems can be set up to show your staff only what they need to see, while management is able to access far more. Most wholesalers will also want a system that can keep them informed about their live sales position, with the information presented in a format of their choosing, at any given moment. There are systems which can show you how much you’ve sold today – by branch, or by sales person. How much profit have you made this week? Who owes you the most money? Who are your best customers? Which product line is the most profitable?

If you’re not used to having this type of information at your fingertips, the answers are often not what you expected. Armed with accurate, up-to-date information such as this, which many modern systems can give you at the click of a mouse, will help you develop better and more profitable business strategies for the future.

You may want your new software to help you plan deliveries. Some systems interface with route planning software. Do you want to use bar code scanners or other hardware such as hand-held computers? If so, check your new software will support these.

Some systems have their own accounts software. Others simply integrate with widely used financial systems, which may be an advantage if your staff and accountants are familiar with one of these. Consider which would be best for you.

These and other questions specific to your business should form a comprehensive checklist to use when interrogating potential suppliers. If the supplier can’t deliver the basic functionality you need, then it’s not worth arranging a demonstration. It’s a good idea to ask about a supplier’s implementation procedure too, to give you an idea of which members of staff in your organisation it need involve and how long it will take.

A final recommendation for forward-looking wholesalers is to find out if a potential supplier will be willing to develop and enhance their software as the industry or their customers’ needs change. An active, self-managed user group is a sure sign that a supplier is keen to listen and develop the system in line with its customers’ requirements.

© 2006. Kindly reproduced courtesy of Electrical Wholesaling Times.