Connected Commerce VS Disparate Systems

Connected Commerce VS Disparate Systems

 

Automating the Business from Online to Bricks & Mortar Store to Warehouse

Digital has changed the world we live in forever. The knowledge and information gap is huge, as we learn more, technology is quickly becoming a retailer’s most valuable business tool. Integrated systems are one tool that replace the multiple disparate systems that had to be manually woven together: spreadsheets, accounting system reports, sales figures, online store info, social media, customer communication as well as many others. Integrated systems eliminate the duplication, caused by handling many different information streams, and streamlines the business processes and activities. Retail today is ALL ABOUT THE CUSTOMER! Customer Relationship Management (CRM) and an online presence, are two key tools to support any retail business. The best systems capture data on all customer interactions with the business, big and small, online and offline. An integrated system gives the retailer the most comprehensive information about their customers, their activity, their preferences etc that can then be used to build closer relationships. The big question is, WHICH system is right for you? Due to past experiences purchasing expensive technology that was never used, Australian retailers are wary of technology; the knowledge, the cost, the commitment and the skills to maintain it. The upside of this is that systems have come a long way in the last few years. Systems are better integrated, more adaptable, scalable and cheaper than ever before. This allows smaller businesses to be more responsive than larger enterprises who have existing systems (legacy systems) that take a lot more work to update. Integrated systems are flexible platforms that can grow and adapt as the business develops. They include, but are not limited to, the following elements:

  • Customer Relationship Management
  • product planning, purchase
  • manufacturing or service delivery
  • marketing and sales
  • inventory management
  • delivery and payment

To choose the best system for your business it is best to tackle one area at a time. Prioritise which of the above areas are most important to your business. For retailers, they sell and interact with the customer in many areas so inventory control and information is vital. A retailer could have a bricks and mortar store + online store + clear items on eBay and need to keep track of inventory in real time. Bringing all this information together instore results directly in better sales results. For example using a tablet, that gives the Sales Assistant information on the customer and their activity, online, on mobile, social and in store enables a better experience for the customer. The tablet is not just for information gathering it is a valuable service tool. Sales Assistants don’t need to drag the customer to a counter across the store anymore. They can process online orders, check stock, process a return, view the customer’s wish list and convert them to a sale. Customers will LOVE this attention and personalised service which will in turn enable the retailer to stand out amongst competitors. So throw away the multiple spreadsheets, printouts, reports and the hours spent blending and interpreting them and get started researching your integrated system. Good Luck and Happy Sales!  

Thorough Does Not Mean Slow

Thorough Does Not Mean Slow

The phrase ‘Change Program’ has a perforative connotation associated with it as so many people have been through so many programs that did not have any results and which distracted them for long periods of time. When making significant and strategic change there is usually an unspoken assumption that the process will be slow, time-consuming and be akin to changing the direction of a supertanker. Many change programs, especially in corporations will run for a year or two, if not longer. The ongoing statements by the consultants (internal or external), the change agents, the Directors, and other stakeholders are something along the lines of “We realise we must invest money and time into this program and that it will be a hard, long, and slow process that will not return measurable results for at least twelve months. We must carefully consider each move and minimise risk along the way” This is wrong! Careful consideration is absolutely essential Minimising risk is incredibly important as things will go wrong Making the process long and slow is a kiss of death for the programs chance of success and delays the return on investment that should be generated. Careful and thorough do not mean slow! Change programs that provide genuine Return On Investment AND are sustained are in my experience change programs that provide a very quick benefit to the people involved in making the change occur. So what do you have to do in order to accelerate your change program? 1. Explicitly define how the client condition will be improved by your change program. If you cannot explicitly define the benefits to your end customer before you start, then don’t start! Find a different program. A change program that does not deliver any benefits to the client will provide little return on investment and generally annoy people who are involved. 2. Why are we waiting? Continually ask this question whenever you are looking at the due dates of tasks and activities. Especially ask this question in any sort of committee or decision making body. Strip it away and see if the reason that time is required is truly for data gathering or is it a case of deferring a decision for no real reason. If the change project is the right one and has a clearly defined benefit then it should be a priority above other day to day activities. Completing ‘Change Program’ activities only when the rush is over will kill your program and cause you to miss out on the benefits. 3. All for one, All for me! No matter how much we can read about people seeing the light and jumping on board for new initiatives it is a reality that some will not. When the CEO makes a decision to implement a change then the only question that other’s should ask is ‘How best do I support the execution of that decision?’ Genuine concerns and obstacles need to be addressed within the program. For some people it is all about them, their power, protecting their position, allowing them to remain doing the same activities. That is not acceptable.If there is a guerrilla campaign to frustrate the program then do not mess around, the culprits need to go, and need to go yesterday. Have a look at past, present, and future change programs and how you think these three issues come into play for you.  

Why you’re Crazy if you don’t Outsource your IT

Why you’re Crazy if you don’t Outsource your IT

 

Servers, VPN, IT architecture for the network and Training of staff (complex systems/multiple systems)

A key question by a number of organisations is whether to outsource or not and whether to own their own hardware or host it. An obvious benefit of outsourcing and hosting is that it lets you have a relatively flat cost curve, rather than the “mountain ranges” associated with upfront costs and then upgrades and replacements. What’s best for any given organisation varies and one size does not fit all. To help you determine what works best for your organisation, here are some of the costs to keep in mind in determining the true costs of maintaining your IT systems and staffing your IT department. With your own infrastructure and systems you have the following cost components:

  • Upfront cost of infrastructure and software licences.
  • Upgrade costs for new versions of software/operating systems.
  • Flow on costs to upgrade existing infrastructure to support new software versions.
  • Replacement costs (approximately every 3-5 years) for infrastructure.
  • Ongoing vendor maintenance and support costs.
  • If you host your own systems, increased rental costs for your computer facilities as you add more hardware.
  • Increased power costs to support additional hardware, air-conditioning etc.
  • If you have multiple complex systems then you will also have:
    • Integration costs between those systems.
    • Potentially middleware software costs.

With staff, you not only have their salaries and on costs, but also the following training costs:

  • costs of retraining and potentially recertification in new versions of hardware and software including:
    • Operating systems
    • Network monitoring, antivirus, firewalls etc.
    • Software versions for systems
    • Training costs for those multiple systems

The flip side is that if you don’t upgrade software versions or infrastructure, then the cost of maintaining those systems and infrastructure increases as vendors increase support and maintenance costs. In addition, your staff costs will increase as a) availability of resources with skills in the older versions becomes harder to find/attract and b) you potentially lose staff who want to work with the latest versions. Personally my philosophy is that your staff, those positions that you require specific intellectual property for your business (e.g. first level support, architects, business analysts and project managers) and then outsource the technical roles (software developers, 2nd level technical support staff) that require specific technical knowledge so that the cost of training those technical resources becomes someone else’s cost. A system that is reducing the costs associated with IT infrastructure is NetSuite’s SuiteCommerce Advanced. Built entirely on the cloud, NetSuite doesn’t have any hidden server room costs. The end-to-end solution allows retailers to focus on what counts and that is customising the buyer journey. Whatever you choose, ensure you determine all the costs of your environment including ongoing training before determining what works best for you.  

Why Wholesalers Need to Act like Retailers & not Warehouses

Why Wholesalers Need to Act like Retailers & not Warehouses

In the retail world that has seen more change, disruption, connection and new successful entrants, the role of wholesalers has changed forever. Wholesalers need to be business builders for their retailers and fully focus on the end consumer. The last 5 years have seen a large reduction in the number of wholesalers with many large long-running businesses closing down. The main reason for this reduction is that they thought they could operate the same way they always have in a rapidly changing retail world. The internet has revolutionised the world, retail included. Ignore it at your peril. The internet is not only a wonderful sales tool, it is also a global sourcing tool. In the past, Australian wholesalers had the advantage of being on an island and supplying under-resourced retailers who did not travel overseas to source products (for the most part), our distance from the rest of the world meant that considerable freight costs and time frames inhibited the average retailer sourcing their own products. All retailers operate in a global marketplace, customers can search and shop the world, so wholesalers must source collections and pricing need to be able to be favourably compared. Gone are the days when wholesalers could go overseas, buy an eclectic collection of products at a great price and offload it onto retailers. They need to be aware of many more elements than in days gone by. They need to consider:

  • Trends
  • Styling
  • Retail Competition – global, not local
  • Assortment in store
  • Visual Merchandising
  • Sales Tips & Language
  • Sales Support for retailers
  • Supply Chain
  • Order lead times

Wholesalers also need to realise that online stores who don’t have a bricks & mortar presence are bona fide retailers! Recently one of my retail clients was told by a larger Australian Homeware Wholesaler that they would no longer supply to them because they ‘only’ sell online. Their agents knew they were online with no physical store and took their $13,000.00 order but when HQ realised, they stopped supply I was GOBSMACKED!! In 2016 for a large wholesaler to be doing and saying this was unbelievable to me. To say it cost my client time and money was an understatement.  Wholesalers should be business partners to their retailers and if mistakes are made, they should be part of the solution not make the problem bigger. Gone are the days where wholesalers could take orders at trade fairs, place the order on their supplier and deliver orders 8 – 12 weeks later.  Wholesalers need to hold stock and supply regularly. Forcing retailers to buy large minimum orders is not good business for anyone long term. At the end of the day, the wholesalers’ business lives or dies by their customers’ (retailers) success. Success is reliant on good business practices and keeping up with the changing marketplace. Retailers are often pre-occupied by the day to day running of the business and don’t see a lot of the innovation, trends or tools in the greater retail marketplace. Wholesalers need to be the eyes and ears of their customers and inform and advise them. By creating partnerships that are mutually beneficial creates good business for everyone. Australian wholesalers have not changed fast enough on the whole. Retailers who are new or adopted digital faster than their supply chain, have sourced their own products and by-passed wholesalers. Some tips for wholesalers to focus on to navigate the changing retail environment: 1. Sell online – wholesale and retail

Wholesale margins are low, the cost of freighting and storing stock is expensive.

With erratic retail sales, relying on retailers to pull through volume is dangerous.

2. Make your customers the stars of your site so the consumer can find stores near them & if none still be able to buy the product that you have invested in.

Encourage your customers to buy a larger percentage of a range for a bigger mention or feature on your site.

3. Work with suppliers to shorten lead times

Manufacturers understand the changing customer demands, so find those who have kept up to date and offer solutions to quick delivery.

4. Find fast, cost effective freight and delivery 5. Share tools and ideas with customers You will notice I haven’t focused on products much in this post, more about the attitude and business practices. These are the tools that will create better retail. Retail is a great industry and partners who are passionate, resourced and informed will create better businesses for everyone!  

Jason Furness Discusses how the Restart has Already Started

Jason Furness Discusses how the Restart has Already Started

 

Winding Down for the Year can Often Feel like an Acceleration to the Finish Line.

But 2016 has already started and many people forget that.

  • How is your forward order bank for January and February? Many of those sales needs to be booked this side of Christmas.
  • Do you have a restart plan that ensures that you hit 100% DIFOT on Day One?
  • Will you repeat a safety induction before everyone starts on Day One? (Risk of injury after a break is higher)
  • Do you have a Marketing Plan and activity already in play for January?

We can often miss a lot of these items as we are exhausted by the year and looking forward to a break. The danger is that we think of Christmas as a finish line and once we cross it we can stop. The reality is that Christmas is just the handover of the baton from one section of the relay race to the next. And when you come back from Christmas you need to be at full speed from Day One.

Set your business up now for a great restart!

 

Guest Blogger Jason Furness Talks Fundamental Cost Reduction

Guest Blogger Jason Furness Talks Fundamental Cost Reduction

 

Why it should Always be on the Executive Agenda?

Most markets have increasingly raised expectations for faster service, better products, and cheaper prices. In markets which are considered to be commoditised many companies struggle to find a differentiator in products or service and default to reducing prices. This domino effect forces them to work on cost reduction. Most cost reduction activities focus on reducing the number of people in the enterprise. This is based upon the false premise of ‘If you take people out, then activities will reduce”. In practice, what happens when you take out the people without re-engineering the process is that service levels fall, error and rework increases, activities grow, and the pressure on the remaining staff becomes enormous. The negative impact of this lack of process change increases if the knowledge of the company systems leaves along with the employees. Unless you have an active, easy to use system, to capture corporate knowledge whilst people are in the business your ‘cost reduction’ project will have some big unintended negative consequences. Some costs can increase! What will inevitably happen is that ad-hoc processes develop instead of planned and effectively low waste systems. For all of the cost reduction activities that have occurred and for all of the cries of ‘We have cut to the bone, there is no more’ our experience is that there are still cost reduction opportunities of 30% in companies. This 30%, and the next 30%, and so on, are only accessible by looking at the causes of cost across the entirety of the enterprise. The focus must shift from improving the efficiency of processes to understanding what processes improve the condition of the clients and your market offer. Stop doing all of the ones that don’t improve these two areas and you are off to a good start. (Yes, I understand there are some governance and regulatory requirements, keep them, ditch the rest) Beyond taking a ‘customer value add’ rather than ‘transaction cost improvement’ perspective we also need to look at the capacity of the business chain. Think of your business as a chain of functions that all link together. These functions all exist to generate revenue for the business and they consume cost in order to do so, some directly, some indirectly. A chain is only as strong as its weakest link. If you think of the cash flow of the business as equivalent to the strength of the chain we can see that in the business there is one weakest link that controls the amount of cash the business can generate. Our goal is to increase the overall strength of the chain (cash flow). This weakest link should be the last place you try and reduce cost, it should be the first place you try to increase capacity, possibly using costs and resources you divert from other activities in the chain. If you focus on eliminating non-value added activities, and have as your overall focus increasing the capacity of your weakest link you can not only make major step change reductions in costs, but also build a more competitive business that generates higher revenues.