A few months ago Steve Dunkley of Hunter Plastics used this column to promote useful strategies for survival during an economic downturn. With still no light visible at the end of the recessionary tunnel Arthur Duffy adapts those strategies, explaining how merchants might use business management software to help implement them.

We all know that the key challenge in a recession is to do more with less; this is precisely what modern IT is capable of delivering — by automating procedures, reducing human errors and saving time. And whilst these benefits can be translated into hard, bottom line increases, many merchants have yet to embrace anything more than a basic accounts-only software package (or are trying to use an accounts package for stock controlling) with some of those that did take the step of implementing a fully integrated, merchant-specific package are using a system designed 20 years or more ago.

"Many merchants may not realise just how much more tightly costs can be controlled with the right software: stock levels can be managed more effectively and automatically to prevent overstocking; transport costs can be reduced by more effective journey planning; and pricing will always be correct with no danger of selling at old prices."

Whilst these systems are doing a job, they are often out of date, meaning they are relatively expensive to run, hard to support, and more importantly, are not helping the merchant save money or increase turnover.

Steve's first specific strategy was to ensure that all costs are tightly managed — good business practice at any time, but obviously crucial during a downturn. Many merchants may not realise just how much more tightly costs can be controlled with the right software: stock levels can be managed more effectively and automatically to prevent overstocking; transport costs can be reduced by more effective journey planning; and pricing will always be correct with no danger of selling at old prices.

Good software also enables the credit control team to monitor customer payment patterns more easily, spotting changes in the average number of days taken to pay and forewarning them of possible payment issues. I know of merchants whose businesses are differentiated by their modern systems, enabling them to win large contracts by more fully satisfying major companies' ITT/RFP requirements.

Software can also be used to record reasons for having quotes rejected which, over time, can provide actionable information. It can also notify you instantly of any sales put through below margin.

Keeping service at best possible levels is another key concern during a downturn. This is made easier when all the pertinent customer information is in front of you on screen when selling to customers at the counter or over the phone. Sales staff can see what customers have bought previously and how much they have paid. Being able to capture this data, as well as being able to note additional information alongside it, provides merchants with powerful business intelligence that can be accessed by sales and marketing teams to help sell more to existing customers — the third of Steve's key principles.

The return on investment benefits are there for merchants who are prepared to invest now in the right system for their business.

It's easier to formulate marketing campaigns to existing customers comprising selective discounts, BOGOFs, etc., when you can analyse their purchasing history. Prompts by the software to offer related products to those purchased will help upsell and add extra value to every transaction too. For example, after every sale of a drill the question 'Do you need safety goggles too?' should be asked.

Having access to the sort of management information which is impossible to access using basic software puts a merchant in a stronger position to react to market conditions and grasp whatever opportunities are out there. Easy management of specials and back-to-back ordering will help staff maximise sales. Modern software will even allow them to access, from the trade counter, suppliers' catalogues for products not normally held in stock.

The return on investment benefits are there for merchants who are prepared to invest now in the right system for their business. When the good times inevitably do return, these are the companies who will continue to increase their return on investment — and their profitability — because they will be able to carry on doing even more with less.

Arthur Duffy is Director of Operations at Progressive Solutions.

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