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Retail Business Management Software Evaluation |
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Introduction
Retail business is getting more exciting with each passing day due to increase in consumption and the changing attitude to live-it-up. At the same time, the business environment is getting more challenging as every businessman wants to utilize the opportunity. The results are increasing competition, more products in every category, volatile pricing environment, changing business processes, lack of consumer loyalty etc. Under these circumstances, the retail business management tool assumes greater significance as it becomes more strategic to your business. The choice of good retail business management tool combined with the correct implementation of the same can result in great business benefits to lower investment, increase sales, lower operating cost resulting in business growth
The purpose of this white paper is to share our views on what a retailer must consider before deciding on the retail business management software. We hope this white paper helps retailers in deciding on the right retail business management software to manage and grow their business. Your feedback and suggestions are welcome and please send the same to feedback@gofrugaltech.com
Top Considerations
As a retailer evaluates the different software tools available to manage and grow his business, the overwhelming consideration for most of them is the suitability of the product to manage the business. While it is very critical to evaluate the suitability of the product, there are other factors that must be considered. They are
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Continuous Evolution of the product & services |
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Maintenance & Support as per your business needs |
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Effective use of Capital [Capability of tool to lower investment per unit / rupee revenue] |
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Features to increase sales |
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Efficiency of Operation [Operating cost per unit / rupee revenue] |
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| In the following sections, we will look at the above in more detail |
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Continuous Evolution - Is the Product Future Proof ?
| S.No |
Requirement |
Vendor
Capability |
Reason for Requirement |
| 1 |
Expandable options to integrate the business management tool with web commerce and mobile commerce [business to consumer] solutions. This will help your business have a web presence to service web-in customers and have mobile-in customers |
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The penetration of Internet and mobile are increasing each day. Like we saw growth in telephone orders [phone-in] over the last few years, there will be significant growth in web-in and mobile-in consumers over the next 3-4 years |
| 2 |
Options to use standards based business to business electronic data interchange tools for improved trade agility, increased order and delivery accuracy, lower supply chain costs with lower cost of operations [due to reduced data entry work] |
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It is getting increasingly difficult to get people to do repetitive, manual work. It is also getting harder to train them on these. The cost of data entry mistakes, combined with the cost of reverse logistics due to order or delivery error are increasing the adoption of B2B EDI tools |
| 3 |
Integration of SMS (short message service) to improved management of customer relationship, vendor relationships and also to notify business owners and managers of exceptional events, business summary and other alerts |
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SMS is becoming a way of life, with the universal use of mobile phones. SMS can be used effectively to manage and grow your business. Customers can be sent sales promotions, reminders and greeting messages. Suppliers can be sent stock and payment alerts. Owner/Managers are sent business summary, exception events, etc. |
| 4 |
Support for trade collaboration processes and practices |
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Collaboration is becoming critical to business success today. Trades offering complimentary products and services, traders operating in different markets, addressing different types of consumers etc. collaborate to lower their cost of purchase, lower their investment or to offer services to their customer base. All these collaboration is happening with telephone and/or mobile phone today with manual processes. Support for such collaboration as an extension to the business management tool is a mandatory requirement today |
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R&D investments to offer business best practices to suit the changing business climate and local cultural/legal environment needs |
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The business processes, technology used and the management practices are changing with times. The software vendor should invest on R&D to continuously invent, learn and implement the best practices in the trade |
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Maintenance and Support
| S.No |
Requirement |
Vendor
Capability |
Reason for Requirement |
| 1 |
Support process - i.e. how are issues reported by customers responded to and resolved |
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Organization should have good systems in place to be responsive in support. Only good system give organizations to deliver timely response and resolution to problems reported |
| 2 |
Support Tools - i.e. The issue reporting and resolution tools |
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Should have email support [very cost effective for non-critical issues], telephone support [when urgent response required], knowledge base [to search and find solution for the problem faced] etc. Vendor should provide resolution through telephone, remote troubleshooting using remote desktop technologies and direct field visits, when required |
| 3 |
Support service level agreement & escalation mechanisms |
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Should have a well defined service level for different support subscriptions, based on your business needs. This is to make sure there will not be any disruption to business. Also, a clearly defined escalation process for escalating critical issues, delay(s) in response etc. |
| 4 |
Does the vendor release maintenance patches to fix bugs / issues in the product |
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Let's face it. Software does have bugs and so it is important that the vendor releases patches for bugs reported by customers |
| 5. |
Is there a easy tool to apply and revert patches using which patches can be downloaded and applied by the business person / his EDP staff |
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This way, the business can update the software based on the issues faced by it, based on its own needs and convenience |
| 6. |
Does the vendor offer support service level as per your business need or provide only one product for all businesses |
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Some business handle large volume transactions, that require no disruption to invoicing. These business require very quick resolution to any issue that affect invoicing. They require different service level compared to another business that can wait. So, vendor must offer different service level where the price is dependent on the service level required |
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Effective Use of Capital [Lower Investment per Unit of Revenue]
| S.No |
Requirement |
Vendor
Capability |
Reason for Requirement |
| 1 |
Features to improve inventory turn / rotation of capital |
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By increasing inventory turn, retail business reduces investment on the product and also can earn higher return on investment per year. So, the business management software should have the ability to measure and improve inventory turn |
| 2 |
Features for efficient and optimal reorder / replenishment |
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By optimizing the effort required for reorder / replenishment, the frequency of reorder is improved resulting in higher inventory rotation. The suitability of reorder process, the ease of reorder tool and the effective tuning of reorder module to suit your business needs are very critical in optimizing the capital |
| 3 |
Effective identification & management of non-moving inventory |
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Non-moving inventory must be identified at the earliest and managed i..e either sales promotions done to liquidate them or they are returned early |
| 4 |
Trade Collaborations |
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The biggest asset of a retail business is its location and the foot print the business generates. A retail business can collaborate with other businesses to get lower cost of purchase, to book orders for high value products or low volume products or for products that have storage requirements etc. Due to such collaboration, there can be more effective use of location |
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Increase Sales
| S.No |
Requirement |
Vendor
Capability |
Reason for Requirement |
| 1 |
Efficiency of handling customers & queue at the billing counter [checkout process] |
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Customers should get a pleasant shopping experience. The efficiency with which customers are handled including the waiting time at the counter are very important in this respect. If customers have to wait longer at checkout counters, they may not return to the store |
| 2 |
Multi-channel sales : Effective walk-in, phone-in, web-in and mobile-in customer handling |
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While the traditional way of shopping [walk-in] still continues, customers also want their retail vendor to offer home delivery based on telephone, web and/or mobile orders. So, it is important to offer these |
| 3 |
Can you record customer inquiries |
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This will help evaluate what new products need to be carried. As there are many new products introduced in the market, it is important to learn customer needs and wants and address the same |
| 4 |
Can you measure lost sales opportunity either due to out of stock or due to low stock of a product |
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The software should record both stock-outs and low stock conditions. This will help identify the limitations in the reorder / replenishment process and address the same |
| 5 |
Customer Relationship Management |
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Does the software make it easy to manage customer relationships. Sales offers, promotions, loyalty, greetings to customer on special occasions, festival offers etc. should be supported |
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Efficient Operations [Lower Operating cost per Unit of Revenue]
| S.No |
Requirement |
Vendor
Capability |
Reason for Requirement |
| 1 |
Reduction in labor / staff required to operate and manage business |
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It is hard to find people & harder to train them. Also, more people means more complexity of managing the business. Also finding, training, retaining and replacing staff is one of the biggest operating cost of a retail business. So, one of the important criteria is to evaluate the business management tool to make sure how much of your business it can automate and how much staff it can reduce |
| 2 |
Effective utilization of space |
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By increasing the inventory turn / rotation, the retail business can stock more product category / products. This results in more effective utilization of space and lowers the operating cost per rupee revenue |
| 3 |
Supplier Management Cost |
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Effective reorder / replenishment, efficient and accurate accounting of purchase, purchase return, promotions and other transactions with the supplier leads to reduction in supplier management costs |
| 4 |
Lower cost of sales |
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Due to increased automation of sales and customer interface processes and due to increased volume of transactions handled, the cost per rupee revenue is lower |
| 5 |
Reverse Supply Cost |
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Due to identification, quarantine and return of non-moving, expiry, breakage and damage goods the cost of return comes down i.e. lower warehousing and handling cost on returns |
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Current Product Capability
| S.No |
Requirement |
Vendor
Capability |
Reason for Requirement |
| 1 |
Business Process Automation Support |
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Does the tool support all critical business processes of my business i.e. it must automate the frequently practices business processes efficiently |
| 2 |
Business Control / Security |
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Does the tool provide all control I require to manage my business. Controls in terms of security / access control and authentication for staff to perform authorized operations and to deny unauthorized operations |
| 3 |
Operational Reporting |
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Does the tool provide all operational reports required as part of day to day management of the business |
| 4 |
Management Reporting |
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Does the tool provide all management reports / business intelligence reports that help in optimizing and improving my business |
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