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Buying A New Business System

Six things to consider

New Business SystemToday, in material handling, the exchange of information is at an all-time high. The changing demands of our customers and suppliers require us to keep updated information at our fingertips. Our time is in high demand; so is the need to manage it efficiently.

In the past few years, the software industry has experienced a paradigm shift in technology. Software developers are now able to provide real-time information instantaneously with technology such as a Windows-based graphical interface system, nonproprietary hardware, open reporting and a SQL relational database. This instant information allows managers to make real-time decisions about their operations, resulting in greater efficiency.

A business system based on new technology will allow your equipment distributorship to operate more efficiently than ever. Take the following five elements into consideration when critiquing a new system: organization, flexibility, completeness, operations and automation.

When exploring options for a new business system, first consider the way your business operates on a daily basis. Then ask, “Is this what works best for our dealership?” The best way for your dealership to operate may or may not be the way it is currently operating.

Think back to when you purchased your last business system. Did you have to change your daily operations to meet the needs of your business system? More likely than not, the answer to this question is yes. Before the shift in technology, business systems were rigid and forced distributors to mold their businesses to fit the previously established system. Today, you have the opportunity to reorganize your business. Decide how your facility would best operate, and find a system that will let you work this way.

The life span of your business system will increase with its ability to adapt to change. Factors such as economy, environment, personnel and suppliers will impact your business differently each year. The ability for your business to accept and accommodate these changes will help you to justify and maximize your investment in a new system.

The future growth of your dealership is also an important topic to consider. The way you decide to run your business this year might not work next year when you add a branch or consolidate your operations. Ten years down the road when you have five locations, your system should still be able to handle the increased business, simply by adding another server. If you border a country that speaks a different language, you may want to consider a system that will support additional languages, currencies and tax policies.

A complete system is fully integrated and already contains the core processes critical to run your daily activities, which streamlines processes in several ways. All data can be stored in one place; therefore, there is no need for multiple databases. Customer and supplier files can be stored in a central location, which eliminates multiple data entry. Departments can communicate and work as one team instead of working against one another.

The core foundation of your system should contain rentals, service, parts, sales and accounting. Investing time and money to write the core systems could be better used internally by documenting your business process. This will help implement your new system more effectively and also allow your business to have a roadmap for the future. However, there are normally certain programs, such as payroll and asset management, that might be better off integrated to outside “expert houses.”

Choose a software package that starts with operations as your base. Parts and service create the most revenue for your business, so build around them. More often than not, companies make the mistake of building their business around their accounting software. This can cause the other core units to suffer and operate less efficiently.

With new technology, all your information is placed in one database. There is no longer a need to compare multiple databases or create typed or handwritten reports. The ability to pull and create custom reports is an operation that should be automated. Your business system supplier should be able to provide you with a basic report template. You can then manipulate this template to create custom automated reports.

Look for a system that automates time-consuming duties that you have completed manually in the past. An example could be preventative maintenance and scheduling. Service work that needs to be completed on a regular basis should update in the contract field automatically. This will allow for less data entry and duplication and more productivity in other areas.

People Are the Key
These five steps serve as a guide to evaluate the efficiency of new technology and how it can work for your business. Purchasing a new system is an investment that should last 10 to 15 years. A software package that has the foundation to last this long will improve your efficiency and bottom line.

Keep in mind that a software package cannot run your material handling business alone. Your staff is still the most critical component of your business. These dedicated people will have to work side by side with your new system provider to get your new system implemented, running and, finally, helping your business realize the efficiencies.

Material Handling Equipment Distributors Association

Lisa Anderson Jed Cavadas Meet the Author
Lisa Anderson is marketing and sales coordinator and Jed Cavadas is chief operating officer at Edgerton Corporation, located in Strongsville, Ohio, and on the Web at www.edgertoncorp.com.

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