Like many of you, we’ve spent the past two weeks talking with our clients about the results of Fall/Holiday 2008. Here is what we are hearing, along with what our clients think the outlook for 2009 is and some things you can do immediately to further reduce expenses.
Maybe your business is not located in a hurricane zone or tornado alley but they aren't the only natural disasters that can occur that dramatically affect a business. When something devastating occurs weather related or not, it demonstrates just how important it is to have a disaster plan in place. You have to be ready for the unexpected.
Inventory is most likely the largest balance sheet asset in your company. How well you plan, purchase, and manage your inventory largely determines your level of customer service and profits.
A formal compliance program can help reduce costs
Quality Circles, Total Quality Management, Dr. Deming’s 14 Point Theory and Six Sigma are all various programs aimed at improving quality in an organization. They have been successfully implemented in many corporations, but have failed to attract a following in the direct-to-customer fulfillment industry. Major reasons for this are the complexity and resources required to implement these highly touted quality control programs.
Selecting an Order Management Software solution, or some other system, is a challenging task. The process normally begins by documenting a set of requirements, constructing a Request For Proposal (RFP), identifying vendors, viewing web demos, and conducting site visits and reference checks. Recently a trend appears to be emerging to select vendors based on word of mouth recommendations and two-hour web demos. Is that really the right approach? Selecting the right vendor is critical to the success of your company. The choices in the software marketplace are overwhelming, and if the software solution meets your requirements, how do you determine if a vendor is the right vendor for your business? Here are a few points to consider.
Management often bemoans the fact that IT projects fail to be delivered on time and within budget. And the truth is, the IT spending waste that occurs in our industry is at times mind-boggling. At F. Curtis Barry & Company, we currently have four clients—ranging in size from $7 million to $650 million in sales—all struggling with the same schedule and budget problems as they attempt to implement new order management and warehouse management systems. Another client invested $350,000 with one of the industry’s leading OMS companies, but after a failed implementation, backed off the project.
If you’re on the hunt for a new system, you know the process and the choices can be daunting. You have to remember that the vendors' job is to sell; yours is to match up your application requirements with the best application strategic approach.
The following five factors will help you do this.
Return On Investment
How will the system improve my bottom line or increase sales? While there are always many intangibles, management should strive to get the user community involved to determine the system’s feasibility based on savings.
Typically, this may cover the current year to the first year under the new system, or the current year operation to several years out to reflect growth. Companies are now striving for short-term paybacks—less than three years, and often as little as 12-18 months.
Total Cost Of Ownership
A frequent mistake that companies make is to look only at the purchase price and what the vendor has in the proposal. You also need to consider the vendor costs for modification, systems integration, adequate training and on-site services, conversion, etc. It’s important to look at this on a multiyear basis: What are the incremental licensing costs as your business grows?
Build Vs. Buy
If you’re developing your application in-house, should this be the strategy
longer term? Consider your growth and complexity—and the rapidly changing technologies of servers and the Internet.
Matching Application Needs To Vendor Functions
There are several steps involved in any reliable process for system selection and implementation:
Here’s the picture: A multichannel company with sales of $20 million has an aging order management system that has been in place for over 20 years. While there are some things that the users like about it, they have basically outgrown the system. They need far better marketing information, e-commerce site to business systems interfaces, forecasting and inventory management, and the ability to deal better with light manufacturing and tracking sets and kits, which are a major part of their business.
Scheduling staff for your customer contact center is much more than simply plugging your customer service representatives’ names into time slots for each day of the week. It’s an infinitely complex task. You have to factor in days off, vacations, skill sets, seniority, and individual availability against the needs of the entire center, call volumes, and fluctuations in volume based on catalog mailings, TV ads, and special promotions. Scheduling all these variables manually can take days – and can leave supervisory staff little time for other important tasks.
