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SHOPPING FOR A COMPUTER SYSTEM?

If you are considering going to computer or changing your present computer system, be sure to take the time to do a thorough job of selecting the right one for your store.  Choosing the wrong system is a costly mistake that no independent retailer can afford.   

You must take into consideration not only the initial cost of the system but the cost of training your staff and developing new procedures to go along with the new system. It takes time to adequately determine your company's information needs, search the market, look at 2-3 systems in depth, select the right system for your store, obtain training on the new system, install the system, and convert all the company's records to the new system. If you make the wrong decision up front, it is a VERY costly mistake both in money and time spent and lost opportunity.

There are a lot of systems available, but only a handful of 'good' retail systems. It is said that you really cannot evaluate a retail software system until you have used it. This statement is absolutely true. However, before this is done there are certain basic tests it must pass:

*  It should allow you to operate on either the class or SKU level, preferably both at the same time, with one class using SKU and another at the class level.

* It should include the requisite modules for payroll, accounts receivable and accounts payable integrated into the general ledger or a very good interface to an outside accounting package so you can avoid having to enter merchandise invoices twice, once into the merchandising system and then again into the accounting system

* It must have good class-level inventory management reporting, preferably with a Retail Stock Ledger report showing beginning inventory, receipts at cost and retail, Initial Markup %, sales, markdown dollars and percent, Gross Margin dollars and percent, and Stock Turn Rate.

* It must calculate and report, at the class level, a correct Stock Turn Rate using sales for the past 12 months and the average of the last 12 months inventory at retail

* It must have a customer relationship management module including some custom fields that you can set up to fit your store’s unique needs and be able to use to select customers for mailings, etc.

The first step, before looking at any system, is to determine your needs.  What management information do you need and want?  What modules do you want included (Inventory Control, A/R, A/P, G/L, POS, Customer Marketing, etc)? 

Check out the software vendor before looking at their product. Is the company stable? How many users do they have? What kind of support do they provide?  Do they provide any formal training?   

Prepare a formal, written specification document listing all your system requirements.  Send this to the 3-4 vendors you have chosen.  After you have received their reply, arrange for a demo with the top 2 or 3 so you can look at the system first hand. I recommend developing a chart or spreadsheet so you can list the question / features on the left and then the vendors in columns on the right.  That way, as you go through the demos and ask questions you can more easily compare the software vendors.

Many times we receive calls asking for a recommendation. We will recommend a retail management information system only after we are familiar with the retailer's operation. We must understand the kind of information management is seeking and will use. In addition, we must be made privy to the financial status of the company so we can recommend a system that is affordable. 

The conversion to and implementation of the new system is not difficult if well planned. The owner need only be involved in the planning part. In most cases the present office staff can be trained to use the new system. We are here to help the store owner select the system that is right for their store. Once that is done, we can be involved in the system implementation and provide on-going help to management to make sure the company gets the most value from its investment.

There is a lot of retail software on the market. Most of it cannot be recommended. Most retailers do not have the time to adequately review all the software packages available. They must be willing to admit that fact and get help.

Choosing the right system for your store is an important decision that will affect your business’ operation for years.  Therefore, it should not be made lightly.  And remember, the best system for your store is not always the cheapest. Spending a little more up front may help you generate more income in the long run.

Retailing has not gotten any easier over the years. Complaining about the competition from chains that have great systems is wasted energy. It is more productive to make the commitment to modernize your recordkeeping by implementing an integrated computerized management information system that includes any or all of the key retail modules so you have the information you need to be more profitable.

© THE RETAIL MANAGEMENT ADVISORS, INC.