The Dangers of a Developing a Custom ERP System In-House

March 27, 2015

problems-with-homegrown-softwareIn theory, developing a custom ERP solution in-house to manage your wholesale and distribution business may sound like the perfect solution. However in practise it rarely is.  Even though the system would be designed with your specific business processes in mind, the benefits gained from a completely customized solution are often outweighed by the resources necessary to maintain such a “perfect fit” system.  It’s preferable to work with an industry specific software company, who can meet most of your software needs out of the box, and provides the option to customize as well. Working with an ERP software vendor who becomes a trusted business partner ensures you get the best of all worlds – a solution that is designed for your specific business type, maintained by a team that provides expertise is the areas of software development and management, and provides guidance and insight into industry process improvements. It’s often the smaller vendors who look to build these types of relationships, as it benefits them in the long run as well – working closely with customers means they get first-hand insight into industry specific requirements, and that enables them to continuously enhance the software to better meet the needs of their target market.  Below we take a closer look at the dangers associated with developing a custom in-house system:

First and foremost, as a wholesale distribution company, your core competency is not in creating ERP solutions, nor should it be.  One of the problems with developing a system in-house is that it eats up a lot of resources and requires a large investment into the technology and skills needed to keep the ERP application up and running.  Even if this task is assigned to an IT department, it still takes time and other resources away from the activities that contribute to the businesses core competency.

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From Receipt to Invoice: The Importance of Inventory Management Software

March 18, 2015

inventory-management-process

The way in which a wholesale/distribution business manages its inventory has a direct and critical impact on its overall success and long term viability. Although this may seem rather obvious, the number of businesses who remain tied to outdated means for inventory management suggest that it’s a more foreign notion than one would imagine. Successful business owners understand that inventory represents their livelihood and its importance should never be underestimated or undervalued. Traditional methods for managing inventory, such as pen/paper or spreadsheets, can still be viable options for smaller start-up businesses, or businesses who hold very small amounts of inventory. However, as those businesses begin to grow and expand their offerings, the redundancies and manual processes involved can become too cumbersome to manage efficiently.

For many growing businesses, the next logical step is implementing an ERP system that encompasses the appropriate inventory management tools to support that growth. By implementing an inventory management system into your business you are adding a new dimension: the ability to track inventory throughout the entire distribution chain, from receipt to invoice.

Receiving Inventory – Inventory management software allows users to scan products at the receiving dock using verification scanners to immediately identify and record the product on arrival. This will record what items were received followed by what bin and shelf number the product was allocated to. Once a product is scanned at the warehouse, the quantity received gets recorded in the back end accounting system for comparison against a given purchase order, thus ensuring accuracy and identifying any discrepancies immediately.

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Factors to Consider When Upgrading Software: Employee Skill Set

March 10, 2015

upgrading your softwareIntroductory software systems, such as QuickBooks, are great tools for small and start-up businesses.    They require minimal training and set-up, are intuitive and easy to use and come with a relatively low price tag.  However, as your business grows and order volume increases, there may come a time where more robust accounting ERP software is required.  ERP systems provide functionality across a variety of departments and are designed to handle large amounts of data, increase automation and reduce the need for duplicate entry. As a result, the implementation process is much more complex and requires significant planning, the benefit being a system that will continue to grow with your company for years to come.  ERP software is a good solution for businesses who have outgrown their existing systems, but what happens when a company outgrows its staff?

Implementing an appropriate mid-market accounting ERP solution can reduce or delay the need to hire additional employees by providing opportunities for automation.  There is less need for manual entry as the system integrates data across all departments including inventory, accounting, contact management, and order entry and processing. However, there are two instances where employees with a more advanced skill set may be needed; (1) when IT management is required, (2) when no one at the company has advanced knowledge of accounting practices.

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Product Recalls and the Need for Pharmaceutical Distribution Software

February 25, 2015

product-recallsAs you can imagine, the pharmaceutical industry is characterized by many regulations and an abundance of meticulous standards that must be met by suppliers and distributors. As an increasing number of products enter the marketplace, the need for tight control measures becomes more prevalent in order to ensure public health and safety. The onus now lies with the suppliers and distributors to meet (perhaps exceed) the standards in place. However, despite these standards certain circumstances have arisen where products have needed to be recalled in the interest of public health. Some of the most prominent drug recalls in terms of scale and magnitude include:

(1) Fenfluramine/Phentermine (Fen-Phen) – developed by Wyeth-Ayerest Labs was recalled in 1997 after 24 years on the market. Fen-Phen was a popular weight loss drug taken by approximately 6.5 million people to help combat obesity. After many users began experiencing heart disease and other related illnesses, the FDA set a recall in motion. The result was roughly $14 billion in damages paid to victims.

(2) Cerivastatin (Baycol) – developed by Bayer and was prescribed to patients as a treatment for high cholesterol and was later linked to a severe muscle disorder. It was recalled in 2001, after roughly 4 years in the market. Damages paid to victims totaled roughly $1.2 billion. Read the rest of this entry »


3 Traits of the Perfect ERP Sales Lead

February 10, 2015

Guest Post by Samantha Hornby

Perfect Sales LeadAs a sales person, I speak with prospective customers every day to try and understand their wholesale inventory software needs to determine whether or not our solution would be a good fit.  Based on the industry they are in, features they are looking for, budget and business processes, it is easy to determine fit after only a 10-15 minute discussion.  As a software vendor however, I am also looking for certain characteristics of the companies I speak with that would also make them great to work with.  Just like companies evaluate vendors, vendors also evaluate companies and there are certain traits that make for the “perfect ERP sales lead”.  These traits usually imply that a company is looking to build a long-term relationship with their ERP vendor, are open to improving processes and believe in the power of software to help them do so. They see implementing software as a strategic investment and not a necessary evil. Below I have compiled a list of the most important traits that I watch out for, and based on my experience, having these traits plays a significant role in the benefits gleaned from implementing new software.

The best ERP sales leads…

Are not limited by budgets and timeframes that are set in stone.  I know what you’re thinking – of course an ERP software vendor would love for all customers to have open wallets, and that sales people all have dollar signs in their eyes, but this is not always the case. When it comes to a project as significant as finding new ERP software, it is important to have a budget in place and to understand what your company can afford.  But even more important is making sure that you’re finding the best solution for your company and not missing out on opportunities because of budget.  Smart and innovative companies recognize that there are a lot of unknowns when first establishing project plans, budgets and speaking with vendors.  Having some flexibility when it comes to ERP software costs is important to significantly improve business processes and find the right software for your company.  This is why costs should only be one of several factors that affect your decision, and not the end-all, be-all. In addition, having a hard timeframe, could lead to a rushed implementation in which case you don’t spend the time properly evaluating software fit and function.

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Stop Printing Reports from your ERP Software

February 3, 2015

ERP-reportsThe history of ERP Software, and before that, accounting software, has leant heavily on reports. In earlier, batch-based systems, users would generate reams of pre-posting edit reports on impact printers every day. At month end, several more forests were destroyed in the name of audit trails and frozen-in-time reports.

As software evolved, the accounting software system started providing users with more timely and meaningful data, and many a sales manager or business owner became accustomed to finding a stack of sales analysis reports on the desk each morning. And again, at month end we now saw management reports being printed by clerical employees and filed for management meetings, and some of these reports were even actually looked at by a manager every once in a while.

We’ve now evolved to a point where modern ERP Software provides all the information you may want in electronic form, whether by on-screen dashboards or timely auto-emailed PDF reports, and many other modalities. And for the most part you always have the ability to re-create (or reprint) any report or document retroactively. There’s really no need to print a report unless you plane to use it at that exact moment in time. And yet…so many businesses still print reports at specific times and file them somewhere – perhaps out of habit or a fear of losing data. The true cost of doing so is measured not just in paper and printer ribbons or toner, but in terms of the time it takes to print and file, and the real estate costs of all those filing cabinets.

So let’s once again examine a scenario: you print the accounts receivable aging report at the end of each month, and file that report in a filing cabinet. I don’t. We are both asked to provide the auditors with the aging report from 7 months ago. So I click my mouse a few times, get to the report selection screen, enter the report date, and generate a PDF that I email to the auditors. Elapsed time: 40 second. Meanwhile, you’re still walking over to the filing cabinet. Once you get there, you’ll have to find the report, walk it over to the scanner (or fax machine, heaven forbid), etc.

In reality, assuming you are using an appropriate, modern ERP system with proper backup processes in place, I cannot really think of any reason to print a report that you’re not going to use immediately – and even then, perhaps your tablet or notebook computer would suffice?

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Is Cloud Based Wholesale ERP Software Right for Your Business?

January 27, 2015

is-cloud-erp-software-right-for-your-companyDeciding to make the switch to a fully integrated ERP system as a wholesale distribution company – whether you’re transitioning from existing software or manual processes – requires a lot of time and resources.  It also involves making a choice between implementing a system on-premises or hosted through the cloud.  So which method is better suited for your business? Although there is no single right answer to this question, there are certain elements that could make a strong case in favour of a cloud solution.  Companies are increasingly opting for this method from the get-go, and others are switching from their current on-premises installation. To better understand why and when it would make sense for your company to seriously evaluate hosting software through the cloud, let’s first take a look at exactly what we mean by each implementation method.

On-premises software was historically the only option available to companies looking for wholesale ERP software which made it more feasible for larger companies.  On-premises refers to software applications installed on-location on a client owned server.  This requires up-to-date hardware and either internal or outsourced personnel for IT management.  It also requires a bit of a larger initial investment when it comes to cost as companies buy the software licenses outright.

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