Things to do with your computer on a rainy day

BY BRUCE CROZIER

Software specialist

While we’re all sitting around on a rainy day — economically speaking — wondering how long the current economic downturn is going to last and complaining about the gloom, let’s think of something to do that we’ve been putting off because we were too busy making hay.

Here’s a suggestion How about replacing that creaky old information system in the basement? There’s no better time than during a downturn to tackle this project. Here are some reasons why:

• Systems vendors’ sales are slow and their pricing for products and services are more negotiable
• Systems vendors have more time to focus on your needs
• You and your people are better able to take time away from the daily operation for a big project
• The sooner you make improvements the sooner you’ll see them on the bottom line.
  
  

But wait! Before you run out and drop a bundle on a new system, let’s make sure you really need a new one. Maybe the old one can be fixed. When was the last time you had it serviced? Maybe you’re not getting all of the performance out of it you could.

Where to start?
Many vendors offer system “audits.” What that consists of varies, but the general idea is your current vendor’s product specialists come in to evaluate your use of their system and look for areas of improvement. If there are parts of the system you’re not benefiting from or are using incorrectly, this is the best way to find that out.

Remember all of those things you had planned when you bought your current system? Some modern systems are so complex and the process of implementing them so traumatic, software vendors often encourage clients to hold off on implementing some of the more advanced features until they are acclimated to the core modules.

So you may have bought a system thinking that automated warehouse was just the thing for you — but not right then. Now would be a good time to resume your system implementation by getting that automated warehouse up and running. Does your system have office automation features you’ve never used? Automated purchasing you’ve never gotten around to setting up? A bar-coding module? Maybe a third-party shipping software product?

Got a report generator you never learned to use? Your vendor may offer off-site training that you haven’t been able to take advantage of because you couldn’t spare the hours away. Now is a great time to get that training.

What’s next?
Okay, you’ve determined you’re getting everything you can out of your current system. You’re using every feature that makes sense, you’re on the latest release, and you have a bumper sticker that says you’re on your vendor’s honor roll. There’s nothing creaking in your basement. But how do you know there still isn’t a new system out there that could be adding to your bottom line?

You should always be window shopping. Not knowing what’s new out there in distribution software is no smarter than not knowing what new industry products are out there. There are a number of software companies specializing in wholesale distribution enterprise applications. Some of those likely focus on your specific industry type. Look for ads in your trade magazines and check out their websites. These companies have regional sales representatives, some of whom have worked in your area for years. Don’t hang up on them when they call. Let them know that you’re not actively looking to replace your current system, but you’d like to stay informed.

With today’s webcasts and online media, neither of you should need to invest too much time or money to get you an overview demo, highlighting their unique benefits or differences from your existing software. Let them know that they are welcome to e-mail you from time to time with updates on new features they’ve added. Ask if they will be doing demos at your trade association conventions or in virtual tech fairs. Keep in mind that vendors have a tolerance level for tire kicking. Don’t expect them to share every detail of their software design just because you’re curious. Within bounds though, most of them will be happy to keep you in the loop on the latest in distribution software.

Alright, you’ve seen what’s out there and now your old system is looking pretty shabby by comparison. But don’t make a decision based on looks alone. Just because that old legacy software is still green characters on a black screen, it doesn’t mean that you need a new system with rainbow colors and a mouse. The only reason to change is if the old system is a liability — you can’t get support or there’s an operations requirement that it can’t handle — or a new system offers benefits to your bottom line. When it comes to information systems, the bottom line is always the bottom line. If it doesn’t improve the bottom line, you don’t really need it. Do your homework and crunch your numbers (see sidebar).

Making a deal
If you are ready for a change, now is definitely the best time. Since most other wholesalers are thinking that this isn’t a good time to be investing in new systems, system vendors sales are suffering. Established, well-run system vendors should be able to fund their non-sales operations with revenues from support fees and stay healthy. But their sales and marketing budgets typically rely on new system sales. Just a few lost sales due to a slow economy can cause them to make uncomfortable decisions about their marketing and sales budgets.

Quality systems salespeople are not easy to recruit. Letting a couple go when sales are slow makes recruiting in the future that much harder. So prospective system providers are more likely to make deals during a downturn. Even if they do no more than cover their direct costs, adding another client to their base increases their support revenue base, and their stability going forward. So lower margin sales aren’t all that bad for them. Deals can be made. For smaller companies in particular, this may be a golden opportunity to get that big-boy system at a little-fellow price.

But don’t let price be the sole factor in your system selection. A poor-fit system is no bargain at any price. There’s a better reason than price to change now. The most important person to making your system installation a success is typically the product implementation specialist assigned to you. This is the person who coordinates all of the resources on their side with your team to make it work. For system vendors, scheduling the time of their limited number of experienced specialists is a never-ending queuing problem. If things are slow for them elsewhere then you have a much better chance of getting the full attention of their senior staff (assuming the vendor hasn’t made cutbacks on staff, which should be a warning sign during your selection process).

Smaller customers frequently don’t get the senior specialists or, if they do, don’t get their undivided attention. A wise man says, “When fish aren’t biting, a the fish caught looks bigger.” Smaller systems buyers can get more implementation support during downturns.

Timing is everything
A still better reason to do this now is your own staff’s availability. Just as their staff has more time when sales are slow, so does yours. The biggest obstacle to successful system implementations is your staff’s inability to take enough time away from their daily work load to learn and implement the new system properly. Installing a new system is like changing a tire while you’re still driving. Obviously it’s much easier if you at least wait until you slow down. This point can’t be overstated. Probably the biggest reason companies avoid scraping decades-old legacy software is not the cost of a new system; it’s the stress on operations and the accompanying indirect cost. If the trauma of change is all that’s holding you back, then a rainy day is the best time to minimize that trauma.

Again, for smaller companies, a slow period is an especially advantageous time for change. In a smaller company, the management team tends to wear many hats. Trying to implement a new system at full speed is even more traumatic to the daily operation. Slower times afford the luxury of change for a small operation.

Above all, the best reason to consider change now is the reward later. How long will the rainy days continue? How bad will it get? If revenues are down and profits are shrinking, then now, not later, is the time to implement changes designed to grow them. In fact, ask yourself why you would bother to make a change in your operation that wasn’t expected to grow your bottom line. Then ask yourself why you would wait until times are sunny again before making those changes. If an improved inventory management system will get you a few more turns per year, shouldn’t you get them as soon as possible?

So it’s raining. Look on the bright side. Now’s a great time to do that big project you’ve been putting off.

 

Bruce Crozier is a business software consultant specializing in the hardgoods wholesale distribution industry. He has 36 years of experience in all facets of the distribution software industry. You can reach him at bcrozier@bcrozier.com or 970/874-3257. His website is www.bcrozier.com.