So you're shopping around for vendors, software and services to replace your current Web platform. Several questions no doubt go through your mind.
If I were to ask “what is the biggest problem faced by your multichannel company today?” I’m sure you would have a lot of ready answers. But when it comes to the biggest business information problem you face, there is one that stands head and shoulders above the rest: finding a “single version of the truth.” Just as you have multiple channels for dealing with customers, you have multiple systems with numerous, and differing, occurrences of key data and metrics. Many companies have grown up selecting best-of-breed systems for order management, fulfillment, call center, marketing, product information, inventory, finance and e-commerce. Companies with large-scale multichannel systems are often surprised to learn that their problem is even worse, because these “systems” are, in reality, multiple individual applications. That’s because no one vendor in the marketplace today can provide all of the best-of-breed components needed, and the reality is that even most ERP systems available to the direct marketplace don’t provide specialized direct, retail or warehouse management functions that are as good as best-of-breed.
You have just spent four months doing your homework to replace your aging call center and order management system: gathering user requirements, writing an RFP, getting capable vendors to bid on it, conducting demos and selecting the finalist. Yet there is one more activity that, if not done superbly, will shake management’s confidence that replacement of the old system will go smoothly. If you haven’t adequately studied how management at every level—from CEO to department managers—will get the information they’re used to having in order to run the business on an online, daily, weekly, monthly and year-end basis, your credibility could be in trouble.
Your senior management just read you the riot act about the company’s proliferation of systems and the lack of data integrity in those systems. “We have the same data—like sales and inventory—in different systems, with different timing and accuracy. Between our order management, warehouse management and forecasting systems, there is no single version of the truth. We are no longer in touch with the data, and the department managers are analyzing performance in different ways and getting different results—even though they are using the same data! No one system gives us more than 25% of the data we need to plan and manage the business. And we aren’t even users of the major business systems.”
For a long time, many prospective buyers of direct and retail systems have complained that there were not very many choices in terms of vendors and their offerings. The good news is that over the last couple of years, some truly new and good competitors have emerged for the multichannel industry. Some of this change stems from acquisitions; more is based on the competitive need to expand offerings to provide more functionality to customers.
More and more companies today are outsourcing fulfillment to avoid making investments in that non-core area, or in the technology necessary for it. We’ve also seen hundreds of start-up e-commerce companies that simply don’t want to be in the fulfillment business. All of these companies are turning to third-party fulfillment (3PF) providers like you. With so much riding on it, it is very important that your front-end (call center, customer service, and marketing) and back-end (warehousing, order management, and fulfillment) systems and technology give you a continuing competitive advantage. The systems you select will have significant ramifications for your personnel’s productivity, as well as how effectively you serve your customers and help them grow their businesses—and the management information these systems provide can help you grow your business. No matter what type of system you’re considering, the purchase is a long-term investment. In short, selecting the right front- and back-end systems for your 3PF business is a major undertaking.
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.
Recently cited information from the technology firm CNET reveals that roughly 49 percent of IT projects suffer from budget overruns, and 47 percent suffer higher than expected maintenance costs. It’s imperative that companies identify and properly plan for all expenses associated with replacing a business application to avoid these costly mistakes. Here are seven ways to help you go about this process.
1.When considering replacing your software application, ask yourself the following questions during the due diligence process:
* What applications will be considered, and what functionalities are required?
* What are the major milestones and time frames necessary to complete the project?
* What’s the total cost of ownership necessary to complete the project?
2. When asking a vendor to submit a formal proposal, include all the vital information necessary to receive a detailed proposal. For example, in the case of an order management system, vital information includes, among other things:
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.
