{"id":3075,"date":"2021-12-08T13:09:01","date_gmt":"2021-12-08T19:09:01","guid":{"rendered":"https:\/\/www.dmsi.com\/?p=3075"},"modified":"2024-02-09T15:30:48","modified_gmt":"2024-02-09T21:30:48","slug":"how-to-choose-the-right-inventory-and-accounting-software","status":"publish","type":"post","link":"https:\/\/www.dmsi.com\/resources\/how-to-choose-the-right-inventory-and-accounting-software\/","title":{"rendered":"How to Choose the Right Inventory and Accounting Software"},"content":{"rendered":"
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Imagine\u00a0you\u2019re\u00a0requesting bids for a new warehouse. When contractors ask about the requirements, you tell them:\u00a0<\/span> \u00a0<\/span><\/p>\n

\u201cNot too big (but not too small either).\u00a0And we need some loading docks.\u201d<\/span> \u00a0<\/span><\/p>\n

You\u2019d never be so vague about such a huge capital investment. Yet, when it comes to selecting a new lumberyard inventory software system, many companies request the equivalent.\u00a0<\/span>\u00a0<\/span><\/p>\n

Without clearly explaining business priorities, a lumberyard or millwork shop risks acquiring software that falls short. To make a wise inventory and accounting software investment, a company should discern whether a vendor can deliver the things that matter most. It is possible!<\/span>\u00a0<\/span><\/p>\n

\u201cThe software industry\u00a0isn\u2019t\u00a0like the car industry.\u00a0There\u00a0aren\u2019t\u00a0standard functions that come with every platform.\u201d<\/span><\/i> \u00a0<\/span><\/p><\/blockquote>\n

\u00a0Unlike in the car industry, there aren’t required features standard to every software platform. When businesses are buying software, they assume all the functions in their current platform are \u201cindustry standard\u201d and will be included in every other platform. They end up with software that has things they want, but discover it\u2019s missing things they need. <\/span>Vendors respond to the information you provide and demo the features they think you care most about. If you don\u2019t clearly explain priorities, you\u2019ll only have a partial understanding of what each platform does.\u00a0<\/span> \u00a0<\/span><\/p>\n

The Benefits and Limits of\u00a0Request for Proposals\u00a0<\/span>\u00a0<\/span><\/h3>\n

Some businesses choose new software by using a formal Request For Proposal (RFP). This means making a list of every required, desired, and nice-to-have feature, assigning points for each answer, and identifying the best software via a score. An RFP answers a messy, complicated problem with a tidy, reassuring grid.\u00a0<\/span><\/p>\n

While the general philosophy behind\u00a0RFPs\u00a0is\u00a0that\u00a0the right decision will reveal itself, there are limitations.<\/span> \u00a0<\/span><\/p>\n

Where\u00a0RFPs\u00a0Fall Short<\/span> \u00a0<\/span><\/h3>\n

First, RFPs prior<\/span>itize software features over business needs. Because they are\u00a0essentially scorecards, RFPs ask questions with simple, yes\/no answers (eg.\u00a0\u201cdoes\u00a0the system have X feature\u201d).\u00a0Open-ended\u00a0questions\u00a0aren\u2019t\u00a0usually included. So deeper discussions such as \u201chow can this system help us cut costs?\u201d\u00a0aren\u2019t\u00a0happening.\u00a0<\/span> \u00a0<\/span><\/p>\n

Second, more information isn\u2019t necessarily better. The pressure to include every possible criterion means scorecards quickly balloon into hundreds of line items. Processing that volume of information is overwhelming.\u00a0<\/span>RFPs risk turning the selection process into a beauty contest. In other words, companies care more about a vendor\u2019s answers than their performance.\u00a0<\/span>It\u2019s more advantageous for a vendor to say they can fax forms than to explain they actually have a better solution altogether.<\/span>\u00a0<\/span><\/p>\n

Lead with Objectives<\/h3>\n

What\u2019s a business to do? How can you be thorough without missing the forest through the trees?\u00a0We suggest\u00a0a simple twist on the RFP: Swap the features\u00a0list\u00a0for a list of must-have\u00a0inventory and accounting\u00a0business\u00a0objectives.<\/span> \u00a0<\/span><\/p>\n

Think about it. Your business objectives drive every other major investment. When you build a new warehouse, open a new location, or add a new product line,\u00a0you choose to do so\u00a0because they help increase revenue, improve customer loyalty, grow\u00a0market-share, etc.\u00a0It is the same with the business and accounting\u00a0software selection process.\u00a0<\/span> \u00a0<\/span><\/p>\n

To create a business-oriented framework for choosing software, go through the following three questions and write down your answers.\u00a0<\/span> \u00a0<\/span><\/p>\n

    \n
  1. STRATEGIC OBJECTIVE: What do we need to focus on to be successful over the next 10-15 years? <\/span>\u00a0<\/span><\/li>\n
  2. BUSINESS STRATEGY:\u00a0What do we need to prioritize\u00a0to achieve our strategicobjective?<\/span><\/li>\n
  3. IMPROVEMENT GOALS:\u00a0How can we improve our processes to better achieve our strategy?<\/span><\/li>\n<\/ol>\n

    \u00a0<\/span>Producing the answers may take time and discussion with others in your business.\u00a0<\/span> Here are two examples:<\/span><\/p>\n

    <\/h3>\n

    ACME BUILDING PRODUCTS\u00a0<\/span><\/b> \u00a0<\/span><\/h3>\n

    STRATEGIC OBJECTIVE:\u00a0Improve profitability\u00a0<\/span> \u00a0<\/span><\/p>\n

    BUSINESS STRATEGY:\u00a0Identify\u00a0and repair hidden costs, inefficiency, and waste in our business<\/span>\u00a0<\/span>\u00a0<\/span><\/p>\n

    IMPROVEMENT GOALS\u00a0<\/span> \u00a0<\/span><\/p>\n

      \n
    • Improve accuracy of our financial data with cost\u00a0allocation, pricing updates, and reporting\u00a0<\/span>\u00a0<\/span><\/li>\n
    • Reduce inventory costs by increasing turns and reducing dead stock\u00a0<\/span>\u00a0<\/span><\/li>\n
    • Optimize time, equipment, and materials used for custom jobs\u00a0<\/span>\u00a0<\/span><\/li>\n
    • Increase employee productivity by automating routine tasks.\u00a0<\/span><\/li>\n<\/ul>\n

      <\/h3>\n

      PINNACLE BUILDING PRODUCTS\u00a0<\/span><\/b>\u00a0<\/span><\/h3>\n

      \u00a0<\/span>STRATEGIC OBJECTIVE:\u00a0Grow market-share\u00a0<\/span> \u00a0<\/span><\/p>\n

      BUSINESS STRATEGY: Achieve more market share by becoming the most reliable, dependable dealer in our market.\u00a0<\/span><\/p>\n

      IMPROVEMENT GOALS:\u00a0<\/span> \u00a0<\/span><\/p>\n

        \n
      • Improve our ability to predict demand so products are always in stock<\/span> \u00a0<\/span><\/li>\n
      • Increase speed and accuracy during picking, staging, and delivery\u00a0<\/span> \u00a0<\/span><\/li>\n
      • Improve our strategies for responding to and resolving backorders\u00a0<\/span> \u00a0<\/span><\/li>\n
      • Improve communication and customer experience\u00a0between branches\u00a0<\/span> \u00a0<\/span><\/li>\n<\/ul>\n

         <\/p>\n

        Going through this exercise changes the mindset of everyone in your company. Instead of giving a feature checklist, vendors will talk about your specific business goals and the different ways each platform might help you achieve them. <\/span>Taking steps to keep your business objectives at the center of the decision means you\u2019ll have better conversations with vendors, more productive demos, and better odds of choosing an ERP system that helps you achieve your goals. <\/span>\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

        Imagine\u00a0you\u2019re\u00a0requesting bids for a new warehouse. When contractors ask about the requirements, you tell them:\u00a0 \u00a0 \u201cNot too big (but not too small either).\u00a0And we need some loading docks.\u201d \u00a0 You\u2019d never be so vague about such a huge capital investment. Yet, when it comes to selecting a new lumberyard inventory software system, many companies […]<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[98],"tags":[],"class_list":["post-3075","post","type-post","status-publish","format-standard","hentry","category-white-paper"],"acf":[],"yoast_head":"\nHow to Choose the Right Inventory and Accounting Software - DMSi<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.dmsi.com\/resources\/how-to-choose-the-right-inventory-and-accounting-software\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to Choose the Right Inventory and Accounting Software - DMSi\" \/>\n<meta property=\"og:description\" content=\"Imagine\u00a0you\u2019re\u00a0requesting bids for a new warehouse. 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