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Distributor Business Systems

Tips for selecting the best software for your company.

In today’s changing world, many technology-enabled opportunities present themselves to equipment distributors and rental firms. Modern business systems provide a powerful opportunity for distributors to integrate and optimize their businesses and position themselves for the future.

When selecting a business system, decision-makers must evaluate every solution and its benefits. The following 15 criteria provide an effective means for business system solution evaluation.

Computer Screen with binary CodeSolution Completeness

Look for an enterprise-wide solution that supports, integrates and optimizes all business functions, processes and information. A new business system should provide fully integrated capability for rentals, equipment life cycle management, insurance, accounting, financing, workflow, remanufacturing, core tracking, warehouse management, warranty and claim processing, mobile service, OEM collaboration and business intelligence.

Dynamic Flexibility
As your business evolves, its business system must adapt. Modern enterprise resource planning (ERP)-based solutions have built-in flexibility through parameters to provide the required behavior (process flows, reports, screen layouts, etc.). This configuration pre-empts the need for customization that, over time, results in high maintenance costs and difficult upgrades. As the business grows, for instance, your parts manager may need to centralize parts procurement processes to improve efficiency and negotiate prices and discounts. Your sales staff may come up with one-time or seasonal promotions that should be quickly configured to complement existing price policies.

Industry Best-Practices Modeling
Systems contain a vast amount of tacit business knowledge, which is often overwhelming for users to comprehend if they are not trained properly. This hampers the speed of implementation, ongoing  im-provement and effective knowledge transfer to new hires. The most effective way to overcome such challenges is through process modeling and documented industry best practices. Through a graphical format and business language, process models and industry best practices empower staff to visualize and map current and future business practices and system-supported processes.

Ease of Integration /Collaboration
Traditional paper-based transac-tions have become electronic in nature, and OEMs today provide options for real-time collaboration and self-service via the Internet. Traditional distributor systems were not designed for online integration with external systems, and integrating them takes time and money. Modern ERPs provide interfaces and events based on Internet integration standards to efficiently connect to any outside application or database. For example, distributors can perform online inventory look-ups into the OEM system while interacting with customers on the phone. Warranty claims can be processed electronically with an audit trail of interactions among all parties.

On-Premise and On-Demand Deployment
On-demand business software is an option enabling companies to reduce costs and complexity while leveraging advanced software capabilities. On-demand is a subscription model that uses the Software as a Service (SaaS), rather than owning and maintaining the software. It requires a modern software architecture and technology foundation; therefore, not all software applications are suitable for on-demand deployment because of performance, security or constraints to run in a multi-tenant setup.

Open or Proprietary System
Traditionally, dealers were not offered much choice regarding infrastructure since most dealer and rental applications were IBM AS/400 proprietary. The term “open systems” refers to the versatility of modern applications to operate on different hardware, operating systems, databases, Web servers and Web browsers. This is a key characteristic for several reasons, including choice, cost, scalability, performance and interoperability. Infrastructure options are important, as requirements and budgets of each distributor are unique.

Total Cost of Ownership
Open versus proprietary systems differ in cost. An average software purchase can include a hardware price difference of $75,000 or more. Ongoing costs are another important, yet often underestimated aspect during the purchase. For example, a system lacking built-in flexibility for configuration, will require ongoing customization, making it a costly proposition over time.

Personalization and Role-Based Workspace
Can screens and menus be configured to meet user needs? Navigation must be seamless to provide the user required information for effective job execution and decision making, while preventing redundant key strokes or clicks. Every user interface should provide powerful search, sort and filter capabilities to get to the right information quickly. Screens must provide capabilities for easy personalization, such as removing redundant data, rearranging columns, changing visual representations, e.g. graphs and charts, etc. Most traditional systems provide static screens with limited flexibility for the end-user.

Multi-Site Architecture
Distributors have grown to multi-branch operations with some business functions centralized or decentralized. To effectively model organizational structure and its business processes, companies are best served with an application that supports a multi-site setup with accurate resemblance of all enterprise units and their distinct roles, i.e. sales office, purchase office, service center, workshop, etc. Traditional systems have limited capability of modeling and supporting the complex multi-site processes.

An increasing number of distributors and rental firms are now global. These global companies now need a seamless support system for multiple currencies and languages, support for local regulation and taxation, dual currency accounting, landed cost support, etc. An ERP-based distributor business system should provide these capabilities at no additional charge.

Scalability and Robustness
The complexity and round-the-clock nature of distributor businesses require a robust, scalable system. In extreme cases, it must scale up to thousands of concurrent users and vast transaction volumes. ERP applications leveraging the latest technology, i.e, hardware scale up and scale out, database clustering, etc., support these requirements.

Application Management
Reliable, secure and productive system administration is a key requirement. The ERP system must provide productive tools for user management, security, application maintenance, archiving, auditing and central deployment of desktop components. Application support for virtual servers, e.g. VMWare, can further ease the administrator’s job.

Web-Based and Mobile Deployment
Increasing numbers of users work from multiple locations. Flexible and secured system access through browser or mobile device has become a requirement. Modern applications should provide various options for remote system access.

Migration Tooling
Migration of data from the old to the new system is important for uninterrupted reporting and analysis of historical information. Distributors are reluctant to jump ship because of loss of data due to absence or poor quality of migration tools. ERP-based distributor solutions offer powerful tools to extract, transform, clean and upload data from any source or multiple sources into the new system. This capability should be verified at time of selection.

Implementation Methodology
Important for rapid, successful implementation is a proven and structured implementation methodology with clear definition of charter, organization, processes and deliverables, and execution accordingly. As organizations grow larger and implementations more complex, the risks and stakes also get higher. The vendor with a proven methodology and a track record of successful, large-scale ERP implementations will offer your organization the highest probability of success, which makes it the last but not the least important aspect to consider.

Material Handling Equipment Distributors Association
Milind Bagade, president of  e-Emphasys Technologies Meet the Author
Milind Bagade is president of e-Emphasys Technologies, located in Cary, North Carolina, and on the Web at e-emphasys.com.

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