All too often, business owners seek computerization as though it were something that could be acquired “off the shelf” from a local store, as though it were something that could be chosen, financed, and installed upon demand. In reality, computerization is an objective, a pursuit, an evolving process. It is best accomplished in stages: evaluation, discussion, selection, and implementation.
Computerization must be a gradual process, with one area running well before you can move on to the next. Over time, as you see what a computer can do, you begin to see many possibilities for your business. As each area is automated, your understanding of your computing needs will increase. For a retail or service operation the logical place to start is with invoicing. But before even starting with a computer system, we must gain the support of the people who will be using it for 8 hours a day, five days a week – the staff!
The entire computerization process is much easier if all of the individuals who will have to use the system are supporting the decision to implement it. Before you even begin shopping for a computer system I encourage you discuss it at length with the staff. You may be amazed to find out that even the most competent employee can be afraid of computers or be reluctant to use it. Some employees may be secretly afraid that the computer will replace them – or even expose things that they would prefer to keep hidden. Allow at least three to six months for review and discussion (debate?) about the computer system. Bring the staff into the selection process by asking them to critique demo programs or sit in on presentations by vendors.
What a computer cannot do:
Computers cannot turn a poorly run, disorganized business into a thriving one – if your business is in a state of disarray, matters will become even more confused after computerizing.
Computers do not necessarily reduce your workload immediately – What usually happens is that you invest a considerable amount of time up front -entering inventory or service descriptions – for example. This may take weeks or months. Eventually, the data is in the system and other parts of your business begin to benefit.
Computers do not run the business all by themselves. Computer systems are tools to be used. The effective use of the data collected still requires interpretation by a human being.
What a computer CAN do:
With the use of point-of-sale or business automation software to replace the cash register, the computer can simultaneously: print a complete invoice instantly, automatically reduce the stored inventory data, update a customer’s sales history, update a salesperson’s records, record a receivable, alert you if your inventory level is too low and many other things. Let us examine each of these in detail.
Replacing the cash register – with the use of a point-of-sale system (so called, because it is used at “the point of sale” ) the computer will print out a clean legible invoice showing what was purchased, how it was paid for, what the sales tax was, and even include an advertising message or coupon on the receipt if desired. The computer has intelligence that a cash register does not have. Say, for example, that you are using a system that keeps track of customer sales. You might have some special frequent customers that get a discount, like a hardware store does with building contractors. Wouldn’t it be great to know that the discounts are correctly applied, and not rely on a salesperson to have calculated that? Most point-of-sale systems are capable of doing that.
Tracking the Inventory – When you start using the system, you will enter all of your inventory levels in and the computer will automatically reduce the level each time an item is sold. For businesses with hundreds or thousands of items or SKUs (stock keeping units) this is a boon. Many systems can produce a “Reorder Report” on demand. Such a report will tell you which items need to be reordered.
Calculating reorders – Depending upon the industry, the proper computer software can suggest the correct amount of merchandise to reorder. Some computers systems track seasonality and can automatically adjust recommended purchase levels based on that.
Tracking sales by Customer – A point-of-sale system can track which customers purchase the most, and even which customers are the most profitable – two important details which are not the same. A Sales report showing Year to Date (YTD) purchases, or YTD profits are helpful to a business owner. Similarly, a report showing which customers have stopped making purchases, say a reduction of more than 30% from one quarter to the next, can signal a sharp business manager that something may have happened. Did the customer have a bad shopping experience? A good manager can pick up the phone and find out and perhaps get that customer back. A feature like this is especially good for keeping abreast of problems with customers who buy over the Internet, or for distributors who may be shipping goods to clients across the country or the world.
Updating a salesperson’s records – keeping track of how much each salesperson sells is an important management tool. Knowing just how much sales and profit each person generates is very useful data. Business owners I have helped are often surprised that the quiet salespeople frequently outsell the very verbal ones.
In summary, the properly selected and installed computer system will save time, money and help you make better operational decisions. It is WELL WORTH the effort and cost. Just allow plenty of time to select and carefully implement this technology.