Automation, setting goals & shopping tips: one stop shopping to streamline your operation.

MOST HOLLOW METAL AND HARDWARE DISTRIBUTORS have taken advantage of some form of automation through the use of programs such as Excel, Word or other generic accounting systems, to accommodate the complexities that are unique to our industry. A dedicated system, designed for our industry, can incorporate these "pieced together" solutions.

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Consider that the typical sales cycle, in this business, forces us write the same information as many as seven times:

* A TAKE OFF

* A PRICKING SUMMARY

* A QUOTATION

* SUBMITTAL DRAWINGS

* PURCHASE ORDERS

* SHIPPING BILLS

* AN INVOICE

With this amount of duplication there are enormous productivity gains to be had from a fully integrated solution, designed specifically for the door industry. It is as simple as going out and purchasing a system, flip the switch and reap the rewards.

But Not So Fast!

The process of automating your business should begin with setting your company's unique goals and objectives and finding the system that best meets your objectives. Here are just some of the considerations that should factor into setting your goals:

* What aspects of your operation do you want the system to automate? Do you intend to replace your existing accounting package or link to it? Consider the whole sales cycle in terms of individual processes such as quoting, purchasing, shop drawings, hardware schedules, project management and walk in business. Form your objectives based on your unique strengths and weaknesses.

* Cost of an automated solution can be very misleading beyond the up front cost of buying the system. While web-based applications often have no up front cost, you should always look at the price of ownership. Consider such things as how many licenses or users you will need as these often cost extra. Don't try to reduce cost by sharing computers. This makes no more sense than sharing pens and will doom the project to failure.

* Will your current computer system be adequate or will you need to add new equipment or a network? These hardware upgrades can be very expensive and may not be needed.

* The annual fees such as licensing can be as much as 20% of your initial purchase price. If a web-based solution suits your needs these expenses can be avoided, while enhancing security.

* Annual manufacturer price list subscriptions can be a real benefit to some companies but many firms sell by the 80/20 rule in which 80% of their sales come from 20% of their product. With an automated product's management tools available on some systems, these very substantial subscription costs can be avoided.

* Then there is the cost of implementation. As I've said there is no magic switch with any system regardless of what the salesman says and while you should expect to do better than "one step back and two steps forward"; instant gratification is often promised but seldom achieved. The implementation stage is often where a project will stall and it will take leadership to overcome resistance to change. Expect resistance from your staff and consider their technical abilities realistically. Usability of your system of choice may have a direct impact on the success of your implementation.

* Security and business recovery should be a serious consideration. "Simple daily back ups to a disk stored off site are seldom enough for a complete business recovery," says Bill Holden, a certified software analyst with Gerris Solutions. "Disaster recovery needs to be tested and re-evaluated on an ongoing basis. This is where a web based application, using a professionally managed server wins hands down" says Holden. "Just as Internet banking is here to stay, web based business software applications, while having been adopted by large corporations, are the way of the future for all software. I had a client whose business burned to the ground yet he was conducting business from a home PC that same morning. I am not suggesting that web based is the only way to go, as the right system for you may not be available on line. Do, however, expect to have a disaster recovery plan in place, re-evaluated on an ongoing basis and expect some real cost associated with this."

Increased productivity is what will pay for your investment in automation both in terms of fixed and ongoing cost as well as your investment of time. Will the system make us faster and better? As simple as this sounds, we have seen many examples of companies that were sold a system that was a poor fit for their needs and resulted in marginal payback results. "Due diligence in selecting a system is crucial", Holden stresses. "Most systems offer a free trial version and you must learn and fully understand the systems you are considering. Too many people buy a system based on specs and promises but never actually position themselves where they can visualize their staff using the system. This is truly the only position from where you can project your return on investment."

Many managers do not have the time or even the ability to learn the systems needed, to make a proper assessment. Software assessment can be outsourced to a Certified Business Analyst. But consider assigning the task of learning the prospective systems to a computer literate inside staff member who understands the unique nature of our industry. Have them set up some fictitious projects, typical of your business, and have them teach you how to use the systems. Only then will you be qualified to make a decision that will affect the very fabric of your operations for years to come.

About the Author: Gerry Muller is the President of Gerris Solutions Inc. and owns and operates an HM/hardware distributorship in Cambridge, ON. 519, Muller Hardware and Supply Corp. He can be reached at www.gerrisinc.com

Reprinted with permission from the September 2007 issue of Architectural Openings.

Copyright 2007. All rights reserved.