- On July 7, 2017
- business development, human resources, software implementation, supply chain management, supply chain software, technology, warehouse software
Pavlina Tsvetanova’s article, published in Your Business Magazine
The technologies develop rapidly, so rapidly that it’s very hard to catch up with all new programs on the market. It is clear to all of us that it’s easier, faster and more reliable if we use a software to run our business. But not any software, we need a software exactly for our business. Luckily for the software implementers, many companies started to update the software they currently use. But for the firms which are seeking to buy a software, the task is not easy, because:
- There are many software programs and implementers on the market, but there is also a lack of specific software for the operational departments in every industry.
Almost every program offers accounting and warehouse modules and just few software companies offer the rest modules – planning, budgeting, production, distribution. The lack of these modules reflects on the results of the whole company because the employees must extract data, make the simulations in excel and return the results in the software. The chance for mistakes is huge. Apart from that, the employees are lost in so many numbers and files. The most dangerous of this is to upload files with old data and so the budget or the production program is wrong. Then the damages are significant, as the material consumption is increased due to change of dies, or other adjustments in the last moment. The wrong numbers in the budget lead to over stock or out of stock. If the data is corrected, and the problems are noticed, usually the planner or the buyer is considered guilty for overstocking or understocking. But no one thinks how to ease the job of these people, so that their knowledge and skills to be supported by the program and not to be wasted in daily fights with the program to extract some data. When starting implementation of ERP system, just few of the companies think strategically and look at the global picture of their business. Just few companies aware that planning and budgeting modules are key and they’d better be implemented first, not months or years later.
Another underestimated module is the distribution. If we can allocate and trace the sales by channel, if we cannot extract quickly reports per customers, etc., the software is not good enough and we are forced to use excel again.
- Implementers refuse to show demo versions.
One unpleasant trick, applied during the past years, is that some implementers refuse to show what exactly the customer will buy. These implementers claim that “it is unserious” someone to ask to see the modules and the links in the software. As reference they use the name of the software and some big companies. The software itself cannot run the business – it is necessary to have good implementation and correct exploitation.
It is good if the customer requires a demo version with his data in the software. And this demo show should be free of charge, e.g. it shouldn’t be charged as part of the development or implementation of the software. Just when the customer is sure that the program may meet about 90% of his needs without additional development, he may sign a contract for purchase and implementation of this software, e.g. the real part of the deal just starts.
- Implementers do not know the business processes and impose models which should work, but they don’t.
Everyone may implement accounting and simple warehouse modules. The peculiarity is in planning, deliveries, production and control. There are interesting examples when the implementer literary misleads the customer by convincing him that the program has specific modules (like for tax warehouse for instance) and later appeared that such specific module does not exist but is built on the customer’s back. Another interesting (actually tragic) example is when one IT specialist has stolen a software and has decided that he can adjust it to any business. He trusted that he is a business consultant and IT specialist (2 in 1). He trusted this so much that he had implemented this software in a production company, while the software cannot calculate even the production cost, doesn’t have place for the production processes and so on. As a result, all employees are forced to write all data on paper and the software is used as an archive only. It is not by chance that people profile in the different areas of knowledge – otherwise we cannot bring value. When we mix two areas without common topics, we get something which either does not work, or works slowly and ineffectively.
- There is no specialized software
For instance, a program that meet the requirements of a production company, cannot be used by a forwarding company. But this does not stop the implementers to offer one and the same software to all industry sectors. Such software is implemented with many development afterwards which makes the program expensive and the customers become a training field for development of software.
- There are many unsuccessful software implementations.
One very expensive investment does not return due to unsuitable program or incapable implementer. Alas, unpleasant but true statistics – in many trade and production companies the software implementation is not completed due to:
- Semi-implemented program – some steps are done just to take some money from EU funds
- A consultant who steals the know-how of the producer and the computer company cannot provide support to its customers afterwards
- Abandoned projects due to so many development and high costs
- Resistance by the customer employees to use the new program while the owner cannot force them to use it
- The implementers do not know the legislation of all business sectors and offer software “per kilo” and all development is paid by the customers. Respectively the buyer cannot justify how much time this program will serve him, when the payment stops and return on investment starts.
The supply chain frequently suffers from wrongly selected or poorly implemented software as the processes there are dynamic and the program stops or delays the work flow rather than supports it. That is why is very important when we select a software to consider the needs of all operational departments. In other words, we need a program, which to give opportunities all operational departments to be flexible, quick and updated at any moment. Sometimes, we face deliberately poor attitude when the implementer refuse to provide a manual. The customer is forced to rely on 1-2 key users who to train the rest employees. In order to ensure a smooth transfer of the knowledge, the implementer must provide a manual in Bulgarian language and pictures of the different menus.
When selecting software, we’d better consider the specifics of our business and the global trends:
- One software to manage the business. It is not ok to buy a small program, which later to be connected with another program or upgrade with other modules. Not only because it is expensive, but also because it is hard to be served. When using only one software, any upgrade and migration of data is fast and simple. While if we have one main program and satellite small programs-modules, any change in any of the programs must be adjusted in the rest programs. I can compare the programs as wardrobe with superstructures. It doesn’t matter how many superstructures we buy the wardrobe is still single-winged and we have to put some superstructures on the floor. The space, occupied by the superstructures is poorly used compared to three-winged wardrobe (which illustrates the ERP system).
- Multi-functionality – the program should be used by all departments, including the electronic shop.
- Multi-channel distribution – all businesses nowadays use many channels to sale their products and services. The software should be able to provide reports about the sales, the planned supplies according to the expected sales and to distribute the new products to the respective customers.
- Mobile version – means working on-line in real time, not updates every day. The mobile version allows work from anywhere and at any time and its application in supply chain is most valuable in distribution. This help us to have a larger window for distribution of our products according our customer’s habits.
- EDI – the electronic exchange of data allows the speed and accuracy of orders to be increased significantly. All mistakes in orders and invoices are eliminated and the warehouse is focused on picking and expedition.
- Increased complexity of operations. The trends now are for shorter production lots and small size deliveries. That is why the software must meet 100% these trends and to combine several operations in one, like packing, adding a manual, labeling, etc. the business seeks cooperation and synergy among the departments and affiliates in order to delivery fast and accurate all parcels and to keep its customers. Such synergy is hard to be achieved if the affiliates work independently and with different software.
- Work with huge databases. Due to shortening the supply chain and transiting from B2B to B2C, we have to work with huge record massifs. The small programs do not have the power to process such volumes or to archive them, which leads to losses of data and problems with legislation. Thus, before buying any software, we have to check its capacity and possibilities to serve us in our near future according our strategic plan for business development.
The stumbling stones in purchasing and implementing modules for supply chain in one ERP system are usually money, time and underestimating the process complexity. If these obstacles are overcome, the planners and buyers would be very happy people, bringing loads of money for the company. The requirements are not so hard to be met, but shouldn’t be neglected too. In general, all supply chain employees are dynamic and want to work. So the program that serves them should be according their temperament: fast, effective, logic, automated. And so, by creativity, correctness and broad actions, we can attract more customers, we can grow and develop our business.