[Editor’s note: For the past three weeks, Curt Barry has presented installments from his ebook, “Reduce Costs, Increase Productivity and Improve Customer Service,” providing 70+ tips to implement in fulfillment, inventory management and the contact center. This week is the final installment covering IT resources.]
For sure, selecting the right operations technology and software – order management system (OMS), warehouse management system (WMS), warehouse control system (WCS), etc. – is critical to the success of your business. Equally important is getting more out of your present IT resources – staff, technology and application systems. This objective should have a higher priority: features/functions of these systems determine the productivity and profitability throughout your business.
[Click here to download “13 Ways to Improve IT”]
Here is a sample of the 13 ideas that almost every company can benefit from to get more from the IT resources.
Perform a post-implementation audit: Our experience is that companies buy commercial systems and typically only use 30% to 40% of the overall functionality. To a large degree this also applies to in-house developed systems. There is never scheduled time to go back, explore using more functionality and implement. Mature systems with hundreds of user companies will have even more functionality and maybe less utilization because of their comprehensive nature. A post implementation audit should be done with 30 to 60 days of go live to identify functions not working correctly, retraining required, reports not working, etc. Systems audits can give you as much benefit as systems that have been operating for several years.
Develop exception reports: I can’t tell you how many times I have seen endless system displays of everything you wanted to know about something. With all that data you may still never find where to spend your time; or where there are no potential problems. Develop exception reports to point you to where to take action. For example, do your merchants have exception reports to flag potential under-stocks needing purchase orders, or SKUs that are candidates for liquidation? The key is to design trigger formulae in the systems which highlight key potential conditions. This can save considerable item analysis and purchase order decision time weekly.
Provide a single version of the truth: How many times has this happened to you? You’re sitting in a meeting about sales trends with reports from two different systems. One report says the business is up 12%, and the other says it’s just up 5%. There goes IT’s credibility with management. With different systems, there are different levels of accuracy and different timing. This is a huge issue that cannot be solved until you bring the multiple systems data into business intelligence systems or data warehouses. One has to literally decide which systems’ data elements are defined correctly, their accuracy and timeliness. Some software companies will tell you ERPs solve this issue. That’s sales talk as many don’t have all the applications and analysis that are needed in larger companies.
Learn more about the retail-ecommerce business: Early in my career, I managed a systems and programming department of 50 people for a major retail and catalog company. Management charged us with learning everything we could about the business. Get IT out of just thinking technology. Start every new IT hire working at least part time in the fulfillment center, inventory control, contact center, marketing, etc. Move them around. They will become valuable to your company and establish great relationships.
To build knowledge key conferences are great ways to teach people and to network. To get other companies’ perspectives, we encourage our clients to attend MCM’s 6th annual Operations Summit 2017, March 27-29 in Pittsburgh. It’s the only event focused exclusively on direct-to-customer, ecommerce and omnichannel operations and fulfillment. Budget for it now and plan to attend.
Don’t cut annual software maintenance: Typically annual software maintenance costs are between 18% and 22% of license costs – it’s a major IT expense. The risk is whether a company can drop maintenance and end up doing a better job of supporting it themselves. I’m not a fan of this approach, especially for mission-critical apps including order management, ERP and WMS.
Focus on a reasonable ROI period: I think most companies are holding on to applications too long. The problem is that they can’t assess their needs and identify an ROI for management. The ROI will come through reducing expenses, increasing productivity and bringing better customer service. We need to have the user community and IT get focused on this with each systems project.
Getting the most out of your IT resources will pay significant dividends if addressed correctly with all of the key stakeholders. Make this objective a critical piece of your short- and long-term planning.
Curt Barry is Founder & Partner of F. Curtis Barry & Company