Plan for technological success.
The home furnishings retail business is the most complex of all retail industries. It requires an abundance of square footage, operates at relatively low gross margins, necessitates a very complicated sales transaction and is plagued with unwieldy inventory control issues. Your typical grocery store manager can tell you exactly how many packs of a particular gum she has but very few furniture retailers can tell you, with reasonable accuracy, how many of a particular sofa they have. The ease with which we can lose track of something so large and expensive demonstrates the complexity of managing a furniture store. This problem is compounded by multiple stores and multiple distribution centers.
Most retailers in today's marketplace would agree that automation is the only practical way they can gain control of their operations. But the complexity of the business has given birth to equally complex computer solutions. Almost all software solutions in the home furnishings industry were originally developed around the needs of a specific furniture retailer. These projects were not only successful but extremely expensive, well beyond original estimates. For many, the decision to market these systems was driven out of a desire to leverage their investment. So great was the demand for inventory control and up-to-date information, that many of these pioneers abandoned their retail businesses and went into the computer business on a full time basis. You've now had a little history lesson, so let's discuss where most of these companies are today.
These software solutions are no longer aimed at a single retailer's problems. They are now jam packed full of amazing programs and reports. They incorporate exciting information tools and high technology features such as barcoding, electronic data interchange, credit card authorization, video cataloguing, hand held terminals and automated delivery routing.
All of these solutions offer more than any single retailer needs. And, at the same time, less than any single retailer desires. To help you understand this paradox, try to imagine a single car that will satisfy everyone's needs. It has to carry up to six adults, get fifty miles to the gallon, fit nimbly into any parking space, go 150 miles per hour, be under $15,000.00 and look sporty. Whatever this car looks like to you, I will guarantee that the next person's picture is entirely different. With every new installation there come new software demands. In an attempt to satisfy every client and still maintain an easily-supported program, screens become overpopulated with options, reports become almost indecipherable and documentation takes two trips to carry. And the closer the program comes to satisfying 100% of one retailer's specifications the further it gets from another's. Hence, my "much more but much less" observation.
So, what's the solution? Stay manual? Stop growing your business? Sell out and open a Taco Bell? Possibly. But let's examine other alternatives.
All of the systems offered exclusively to the home furnishings retailer are of high quality. They all work, within compatible hardware limitations. For every ten or fifteen users that complain about their system you will find one or two using the same system who sincerely believe it was a major reason for their success. Why are some so successful and so many more unsuccessful? The key lies in the approach to selection, installation and ongoing support.
The foundation for success begins with the computer selection process. Setting expectations for management, staff and the computer vendor should be accomplished long before the investigation begins. However, this exercise rarely takes place until after the system is purchased. One of the reasons for this is the retailers lack of confidence and experience in the task of choosing a computer system. To compensate for this computer vendors have created their own evaluation routines which they use to guide their prospects. A retailer's decision to buy is often based more upon a good relationship with the salesperson than it is upon total comfort with the software solution. And, unless you know exactly what questions to ask, reference testimonials are generally very misleading. Because of their interdependence with the software vendor, very few references will volunteer negative information when you call them, but they will generally answer your strategic questions responsibly and honestly. Just asking "are you happy?" is pretty weak investigative work. If you received the name and phone number from the vendor then the answer is predicable.
By now you may feel I am criticizing software vendors, but I am not. They are doing everything in their power to satisfy existing clients while courting new ones. If they did not put equal effort in new sales, support costs would skyrocket. It's not their responsibility to choose the right system for your store. It is yours. Here's how you can do it with confidence.
Assemble a task force internally that is not only responsible for evaluating systems but for making sure the installation is successful. Before you contact any vendors, develop objectives for the installation. Objectives can be stated in terms of improving turn rate, accelerating the sales process, improving customer relations, gaining control of inventory and so forth. Once these objectives have been established you should list the features your team believes are vital to achieving these objectives: rating the priority of each (most to least important). Combine this list with a profile of your company, your growth plans and what you wish to achieve through automation. You've now created a basic Request for Proposal (RFP). This RFP serves not only as a foundation for the purchase but for the implementation as well.
Once the selection has been made, you must now develop a Project Plan. This plan outlines implementation tasks, areas of responsibility, training curriculums, customer reports, forms and all other items critical to an effective installation. All vendors will assist you to varying degrees with the installation process. But the burden of success is yours. They have many clients to service and must encourage implementation strategies that serve their needs as well. They must install your system smoothly and quickly while minimizing the need for resources and additional programming.
This generally requires making your company fit the software as closely as possible. But your true goal should be to make the software fit your company's objectives and culture. This conflict of interest is normally where the implementation process begins to break down.
You do not have to be a computer expert to know what your business needs. Every step in the task of automating your business should be consistent with your RFP document. Remember, if you don't have your objectives documented then you'll have no way of setting expectations or measuring success.
A good system installation will make you more profitable by providing greater control, timely information and improved internal and external communication. A poor installation will dwindle your bank account, disrupt your business, punish your customers and handicap your growth plans. Don't heap the responsibility of a successful computer implementation on your software vendor. You have a lot more to gain, and much, much more to lose.
Patrick West is a Senior Management Consultant at Shepherd Management Group, a leading sales, management and computer system consulting firm. For more information about the topics discussed in this article contact tshepherd@furninfo.com.