However, for an important decision on a system that will manage your business and income, I am amazed at how many small to mid-size companies base their system selection on a word of mouth recommendations, a 2 to 3 hour Webex demo and a commitment from a vendor that the functionality will be delivered in a 2 to 3 month time period.  If you are one of the few fortunate ones where this has worked for you then my hat is off to you but for the majority, this easy path is a mistake.

I worked with a company a year ago on a separate project and at that time they had begun looking for a new systems solution.  I offered assistance to help them with their requirements and search but they opted to pursue the systems search on their own.  In a chance meeting I ran into them recently and asked how the system implementation had gone.  To my surprise it hadn’t.  The vendor they selected based on a couple of Webex demos and few short meetings couldn’t meet their functionality demands.  After 9 months of effort the project was abandoned.  The company’s owner came up to me and said “you know, everything you warned us about how we were approaching the project and the risk involved turned out to be true.  I wish we had taken the time to listen to you and used your expertise.  The money that we would have spent with you would have been well worth it”.  Unfortunately the company lost a full year’s worth of time and of course the expense that goes with it.

Lessons Learned.  Taking the easy path on systems has never worked for me in the past.  It inevitably causes heartache and pain down the road.  Selecting e-commerce, order management, warehouse management and enterprise resource planning systems takes time and due diligence.  It all starts with an analysis of your current business, developing requirements and knowledge of the software vendors.  When it is time to search and select a system and you’ve come to that fork in the road, take a hard look at which path to take.  How about your company, have you taken the easy path only to have the project fail?

Tocky Lawrence is a Vice President with F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory, and benchmarking.

The How To Videos are exactly that, how do I as a user of Order Manager, use the order management software. The videos, of which there are 22 of them posted on the website, cover a wide range of topics like:

End Of Year Procedures

Setting Up Table Based Shipping Rates

Barcode Scanners with the Order Manager

List Maintenance

Importing Products

And The Purchase Order System

A few of the videos in the How To section are from past webinars. Each video focuses on a specific topic. What I liked is the easy access to the videos on Stone Edge’s website without the need to “sign in” or register. One can simply access the How To Videos from Help & Support, Videos. Not only do users of Order Manager benefit from the How To Videos, it’s also a great way for potential clients to view a few of the capabilities within the order management software. I found the How To Videos informative and an excellent resource for the Stone Edge user community.

What are your thoughts? Have you viewed How To Videos from Stone Edge or other software vendors? Share your experiences.

Tocky Lawrence is a Vice President with F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory, and benchmarking; learn more online at: http://www.fcbco.com.

Jos A. Bank, were an early adopter of cross-channel order processing.  Store associates at Jos A. Bank have access to the inventory positions in their other retail locations via MICROS-Retail’s Tradewind Point of Sale and to their direct commerce operation utilizing MICROS-Retail’s CWDirect Order Management System, all from their point of sale terminal.  As an example, a store associates can place an order against direct commerce inventory and that order will seamlessly flow through the fulfillment process as if it came directly from the customer.

Title Nine Sports is using MICROS-Retail’s Cross-channel Inventory Broker (Locate).  Title Nine Sports can identify inventory in alternative channels and have those items reserved against demand.  Those orders will be shipped to the customers’ home, office or gift recipient or set aside at their appropriate retail location for store pick-up.

MICROS-Retail Locate’s Order Broker module has system controlled business rules that determine where a product can be picked and shipped from.   Prior to Order Broker a user had to manage all the decisions.  Order Broker has decision rules for checking to see if there is a purchase order that will come in within days at the distribution center, the location that has the most inventory, stores which are not available for picking (e.g. new store), and determine where to ship the product from. Once this is done the appropriate order picking and shipping documents are produced to fulfill the customer’s request.

So let me ask you this – are you taking full advantage of your total inventory position to satisfy your customers and achieve a higher order and item fill rates?

Paul Sobota is a Vice President with F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory, and benchmarking; Learn more online at: http://www.fcbco.com.

Operations that still try to manually record data and enter information manually risk the inevitable error in the input issue. It is too easy to write down the wrong information or to make errors in data entry and to rely on a manual process to gain inventory and activity accuracy. In addition to accuracy concerns, those warehouses who do not employ bar code technology miss out on potential productivity gains.

It is not necessary to totally revamp your processes and replace all manual operations with bar code scanning technology. I would suggest you identify those areas where the maximum benefit can be obtained and focus on these areas initially. You can always expand the application of this technology later as the justification presents itself.

It is possible to include real-time bar code scanning updates to warehouse transactions or to queue up transactions and utilize a batch upload process. You can select either method based on the function being studied and the need or benefit of utilizing real time updates.

Bar codes can be used throughout the operation. They are utilized in the following areas in many warehouses.

Receiving – bar codes at the unit, carton, and pallet level are used to record product movement throughout the receiving process. In addition, document bar codes can reduce manual and clerical time required to receive product.

Put Away – scanning bar codes on products from receiving and the location where that product is placed in the warehouse provides accurate inventory location tracking, which is a fundamental necessity of a well run operation.

Replenishment – by scanning product out of a reserve location and into a pick slot, accurate and potentially real time information is available for the picking process.

Picking – the use of scanning while picking confirms that the right product is being picked. In addition, those operations using a form of cart/bin picking utilize bar codes to confirm that product is placed with the right order.

Packing – the use of scanning to pack verify orders increases the order accuracy level to avoid shipping mistakes.

Shipping –some level of scanning is used in most operations to sort and manifest packed orders.

Returns – bar coded return documents and product bar codes can be used to accurately and quickly process returns and issue appropriate customer credits.

Cycle Counting – by using bar codes on cartons or pallets and warehouse locations, the cycle counting process becomes very efficient.

Productivity Tracking – by using bar codes to track activities and associating these activities to individuals through a sign on process or through scanning employee bar codes, it is possible to track and record what each individual has accomplished.

I am sure there are many other uses of bar code scanning in the warehouse. But these may trigger some thoughts about your warehouse as to where this technology could be applied.

Let F. Curtis Barry & Company assist you in finding the right bar code system and develop the strategy on how to effectively use bar coding in your warehouse and operations.

Bob Betke is vice president of F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in warehouse and distribution, warehouse management systems, order management systems, call center, inventory management, and benchmarking; Learn more online at: http://www.fcbco.com

1. When considering replacing your software application, ask yourself the following questions during the due diligence process:

• What applications will be considered, and what functions are required?
• What are the major milestones and time frames necessary to complete the project?
• What’s the total cost of ownership necessary to complete the project?

2. When asking a vendor to submit a formal proposal, include all the vital information necessary to receive a detailed proposal. For example, in the case of an order management system, vital information includes, among other things:

• Peak and average figures for the number of concurrent users;
• Order volumes by month, with the peak week;
• Average lines and units per order; and the
• Number of customer records.

This information isn’t only necessary in identifying the licensing, but also the proper sizing for application and database servers.

3. Analyze the vendor proposal painstakingly. For items such as training and implementation services, understand the number of days being proposed and what roles or tasks will be performed by the vendor. Be careful of terminology like “the normal training days are X” or “the standard project management days are X.” Make sure the “typical” or “standard” days are sufficient for your project.

4. Understand the vendors’ license maintenance and support plans and when payment is due. Many vendors charge these fees once the application is delivered. Some maintenance plans can be as high as 20 percent of the MSRP or originally proposed license fees.

5. From an application licensing perspective, review the pricing model and any optional modules that may be necessary to support the functionality within your business. If the vendor is supplying the hardware for the application and database servers, be certain the hardware is sufficient and budgeted for, including the necessary hardware upgrades if optional modules are added later or if the licensing forces the hardware into major upgrades.

6. For program modifications or integrations to other software applications, provide functional specifications for the vendor to submit a formal proposal. While the vendor responses may only be estimates, the more detailed the specifications, the better a vendor can estimate the expenses. Don’t wait until after the project is approved to get these expenses.

7. So far these expenses have focused on vendors’ costs and haven’t addressed planning for internal expenses. Be careful, because internal expenses are usually less budgeted for and can lead to project overruns very quickly.

Travel expenses are one example of internal expenses to potentially budget for. It’s often necessary to travel to and from vendors’ facilities, as well as travel expenses for the vendor to be on-site. These expenses can be as high as 15 percent to 18 percent of the total services for the project. Be aware, some vendors charge a travel fee if the travel is over a certain number of hours or they charge cost plus 2 percent to 3 percent.

Other internal expenses to consider budgeting for include:

• an increase in payroll or overtime to complete the project;
• the hiring of temporary labor or outside resources, such as consultants or programmers; and
• upgrades to other network hardware or the rewiring of the internal network.

Formalize a full budget before proceeding, being sure to build in sufficient dollars for items such as services, programming and training that may not have been sufficiently budgeted for by the vendor. By clearly defining your budget, you can avoid being one of the 49 percent who exceed their IT budgets.

By avoiding these common mistakes companies will be able to reduce the risks involved with selecting and implementing any business application whether it’s an order management system or ERP application, ecommerce platform, retail point of sale application or warehouse management systems.

1. Having the wrong expectations

Determine the options available and develop a strategic direction.  Understand the type/tier of software that will best suit your company, understand at a high-level the capabilities and limitations.  Make sure that you also develop preliminary budgets, don’t just assume what the cost might be.

2. Not Having the Right Project Team in Place

Success is driven by assembling a strong project team.  Be sure to have executive sponsorship that supports the project from start to finish, and have team members from each of the functional areas.  Be sure the project manager is capable of supporting the project, if not use an external resource to assist you.  Don’t rely on IT to perform the project for you – it must be supported by all areas of the business utilizing the application.

3.  Companies Fail to Develop Adequate Business Requirements

Avoid generic or basic requirement documents online or received from consultants.  Interview each functional area that has a stake in the new application.   Don’t re-create the existing system in the requirements, but address the functionality needed; not necessarily how it should be accomplished.  Document interfaces to other applications necessary, including the data points and frequency data is passed.

4 & 5. Limiting the Search to 1 or 2 Vendors & Not conducting a Competitive Bid Process

These two really go together and are one of the more common problems we tend to see.  Keep your options open, don’t settle on a solution prematurely.  You need to have 2-3 vendors in order to negotiate the best functionality and services for the investment.  No one vendor is perfect for all companies and no one vendor will fit a given company 100%.  Perform the proper due diligence and make the best possible software selection.

The vendor landscape is always changing and new functionality is constantly being developed.  Making sense of all the changes and directions vendors are going in can be daunting.  Since 1984, we have assisted our clients with navigating through this process and successfully selecting and implementing software solutions that best fit their company.  Let us know how we can assist you with your software project.

Brian Barry is a Senior Consultant with F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory, and benchmarking; Learn more online at: http://www.fcbco.com.

But is an all in one order management system reality or utopia?  Does it exist?  The short answer to whether or not it exists is a definitive maybe…

The reason why the answer is a maybe is because there are so many factors to consider.  Order management software vendors may state that they have functions that support your needs at a high level, including call center, warehousing, ecommerce, finance, point of sale, data warehousing etc.  But are those functions supported in a single database design and does it meet your other objectives in terms of decreasing data silos, reduce the points of contact for support or the total support efforts and resources?  In addition, are all those order management system functions strong enough to truly support your business?

I can’t answer that question for you, other consultants can’t answer that for you and software vendors surely can’t answer that for you, not unless you do your homework – all of it.  Your business requirements and due diligence process is the home work I am referring to.  In some cases, businesses will be able to evaluate, select and implement a single order management software solution for all their business needs.  In other cases, businesses will be better off integrating best of breed solutions.  Do not short change your business needs and goals for a vendor or group of vendors that can’t deliver – just to end up with “utopia” that might negatively impact your business and your customers.

Our experience with order management software for multi channel businesses has let our clients avoid the many pitfalls and mistakes that companies often make when evaluating and implementing applications or developing software strategies.  If you are contemplating new order management software for your business, call us and let’s talk about how we can be of benefit to your company.

Brian Barry is a Senior Consultant with F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory, and benchmarking; Learn more online at: http://www.fcbco.com.

Two things which I wish to pass along to my reader’s from John Marrah:

• Systemax and Mr. Marrah are going to do everything they can to help the current PCS client companies make an orderly decision and transition.  The reality is that this needs to happen in the next 6 to 8 months for companies.
• On behalf of Systemax, Mr. Marrah also said that he is actively looking for a buyer for the application and technology used in the PCS product.

I’m not going to editorialize over the bones of PCS.  Every time an order management software vendor or resource fails in our industry to me it’s a tragedy.  Certainly, PCS with its SaaS order management systems approach blazed a new trail.  Our industry thrives on new approaches, no matter if it’s technology, data base approaches, printing technologies, e-mail marketing approaches.

We are working with several PCS users to chart their new directions for order management software.  Contact us if we can help you.

For a long time, many prospective buyers of direct order management software and retail management systems have complained that there were not very many choices in terms of vendors and their offerings.  The good news is that over the last couple of years, some truly new and good competitors have emerged for the multichannel industry.  Some of this change stems from acquisitions amongst order management software providers; more is based on the competitive need to expand offerings to provide more functionality to customers.

Some e-commerce platform providers are expanding offerings into the order management systems arena.  Enterprise-wide systems are starting to be installed more widely in this market niche as well.  There are also multiple choices to manage the warehouse and supply chain. Would a service offering fit your requirements better than an in-house licensed implementation?  These are just some of the trends we see emerging that give you, the order management software buyer, many realistic choices.  Drawing from our multichannel consulting practice, we present what we see as those choices. 

E-Commerce to Order Management
A number of leading e-commerce solution providers are expanding from Web site development into order management and on into fulfillment.  In some cases this is driven by competition and in some by it being a logical extension of functionality.

GSI Commerce acquired NewRoads, one of the leading call center and fulfillment 3PLs.  The company has a service offering that spans e-commerce all the way through fulfillment.  What’s interesting is that the bricks and mortar retail industry, which has generally favored in-house, licensed software options, has been willing to embrace services, including e-commerce, Web development and hosting, point-of-sale, help desk functions, etc.  Look at King of Prussia, PA-based GSI’s client list and you’ll be impressed with the retail leaders to which they provide services.

In the Cleveland, OH-based MICROS-Retail family, Fry—the provider of choice to many leading e-commerce companies—has integrations to CommercialWare’s Order Management Suite, Serenade. Fry also has a service offering for call centers with Convergys, a strong player in call center outsourcing.  The MICROS acquisition of CommercialWare, eOne (e-commerce solution to small and moderate sized direct businesses) and Fry rounds out their multichannel POS and store offerings.  This synergy is apparently paying off.  The fiscal year ending June 30, 2008 was one of record sales for MICROS and MICROS-Retail.

Another provider we think is worth looking at is Vcommerce Corp. (Scottsdale, AZ), which has as clients Target and Overstock.com.  Their software offering includes e-commerce and a solid order management solution.

Where we see e-commerce companies extending functionality, it often includes call center and customer service.  There are a reasonable number of customer calls that overflow from the Web site as customers seek answers to their product choice, inventory availability and offer questions.  Many customers are also wary of submitting their credit cards in an online shopping cart.  One of the biggest benefits to this expansion in scope—whether a service or a licensed product—is that it can eliminate some of the most complex integrations between a Web site and business systems, involving business rules, inventory availability, pricing engines, etc.

Unfortunately, in many cases these new offerings do not offer the fulfillment system functionality that is required for warehousing functions, and will require a warehouse management system for backend fulfillment.

WMS, WCS or SCM Systems: Which Do You Need?
Assuming that your order management or ERP system does not have fulfillment functionality or cannot meet the more complex needs of your warehouse or supply chain, there are three categories of software you should consider: the warehouse management system (WMS), the warehouse control system (WCS) and the supply chain management (SCM) system.

Just a word about each of these warehouse related systems.  Order management and fulfillment systems may be less robust than a full function WMS. A warehouse management system is a key component of the supply chain, as it manages the four-wall inventory location and movement throughout the receiving, checking, stock put away, replenishment, picking, packing, shipping and returns departments and processes. Work order systems are available to assemble kits and sets in the production process.  Additionally, they help schedule labor and report on productivity.  WMS often provide and use barcode scanners, mobile computing devices, and radio frequency for real time data capture.  Generally, a WMS does not have the advanced software drivers required to manage workflow and material handling equipment (MHE).  Workforce management systems interface to enterprise (ERP) or order management systems, which pass down to the WMS orders for in stock, pickable product.

One needs to be smart about the choices.  There are literally hundreds of tier 1, tier 2 and tier 3 WMS vendors, and their systems are available with varying functions and costs.  But many of these WMS do not have small order pick, pack and ship fulfillment industry experience.

A WCS is generally imperative where there is advanced MHE which must be interfaced between the order management or warehouse management systems.  The WCS directs automation of conveyor lines, shoe or tilt tray sorters, automated packaging systems, palletizers, etc.  There are some WCS vendors that are planning to add more WMS functions to their future offerings.

SCM systems encompass the movement and storage of raw materials, work in process, and finished goods from the point of origin to the customer’s home, place of business or stores.  In our opinion, Atlanta-based Manhattan Associates offers the broadest and deepest functionality in this area for the multichannel industry, including:

• Warehouse management
• Retail, e-commerce, catalog and wholesale SCM planning, forecasting and inventory management optimization
• Multi-warehouse inventory management and order fill rules for distributed centers, by region or from-store fulfillment.
• Inbound and outbound freight management
• Labor management and slotting
• Workflow management

System choices that are considered often revolve around IT platforms.  Manhattan Associates offers three levels of product offerings that cater to major IT hardware and software platforms: Microsoft .net, iSeries, and Open Systems.  While the offering is not identical for all three platforms—resulting in different license costs—Manhattan makes much of the full functionality available to a wide range of company sizes and number of users, including small and moderate sales volume companies.

ERP Into Marketplace
Almost universally, we hear clients declare they want to have a single ERP system for all functionality, eliminating the need to develop interfaces/integrations between best of breed systems.  They also want to eliminate the need to deal with multiple vendors, and the associated IT complexities.  The reality is that a robust ERP system customized to the direct industry doesn’t yet exist.  However, ERP systems are becoming more robust with Direct Marketing systems functionality.  Two good examples are Sage ERP X3 (formerly Adonix) and Junction Solutions.  Irvine, CA-based Sage North America is working with direct companies A.M. Leonard and Carrot-Top Industries to develop more direct functionality.  Chicago-based Junction Solutions has implemented its products at industry leader Miles Kimball.  Junction Solutions’ mission is to provide multichannel functionality from POS through backend fulfillment.

We also see several SAP value-added retailers developing marketing and implementation approaches to the multichannel industry.  Look for these offerings to become stronger and meet the needs of the multichannel industry.

Limiting Implementation Time and Cost
For many in-house, licensed software products, as much as 50% of the cost is in implementation services.  To reduce the cost of more comprehensive systems software, companies are selling pre-parameterized software implementations to scale back the effort required by both the vendor and the client to implement the system.  Two examples of this are SAP (SAP Business All-in-One) and Manhattan Associates.  Full functionality is generally visible to the customer, so once the initial implementation is successfully up and running, your IT management and users can then see how functionality can be expanded through changes to the system set-up parameters.  The result is to reduce implementation cost, time frame and complexity.

Multichannel Forecasting and Inventory Management
The challenge of planning, forecasting and managing inventory for retail, e-commerce, catalog and wholesale channels falls directly into the laps of merchandising and inventory control management.  Direct Tech and Manhattan Associates have answered these needs with two totally different approaches.

Omaha, NE-based Direct Tech, with 37 installations in direct and catalog companies, has researched and developed a statistical-based forecasting system for businesses that have product history.  Additionally, they will import retail selling history to be combined in the model for companies that have retail stores.

Manhattan, on the other hand, offers specialized planning, forecasting and management across all three channels, based upon their acquisition of Evant several years ago.  Their offering looks at retail store replenishment and multi-distribution center inventories.

Expanding Functionality
One of the key reasons customers buy an annual support contract for software is to receive the upgrades in functionality that vendors develop and offer.  Company sources offered three key areas of developing functionality for this article:

• Escalate Retail now has many of its users converted from the MPE platform to Open Systems.  Brian Johnson, VP & general manager of the San Diego-based company, raised an important point:  the credit card industry (and VISA in particular) has made it a requirement that all software companies and their clients in the retail and direct industry must implement the PCI standards for PA-DSS by 2010.  The credit card industry has had its hands full trying to deal with millions of retailers on PCI compliance.  While the date may change, it appears that they are pushing adherence through our vendors.  Take heed.

• Barney Stone, president of Plymouth Meeting, PA-based Stone Edge Technologies, points out that they are beginning to implement a number of advanced picking options, which should make their fulfillment users more productive.  What’s important here is that typically Stone Edge markets to small e-commerce and catalog clients—and they have 2,000 implementations.

• Tyce McIntosh, VP Marketing of Indianapolis-based order management provider Natural Solutions, sums up his company’s direction by saying that many clients and prospects want to greatly improve their Web site and shopping cart integration and functionality.  “This is where the business has migrated, and we need to make this a robust solution.”

Good Time to Invest In Systems
For companies that have relative financial health, this is an excellent time to invest in the e-commerce, order management and warehouse management software that your business needs to become more efficient and to grow.  It’s now, during a time of uncertainty, that your competition may not be able to make the necessary changes.  There isn’t a software vendor in the retail and direct commerce space that hasn’t seen soft sales.  We see this as a time when you can negotiate a fair but reduced cost.  From a return on investment perspective, management is expecting an 18- to 24-month ROI from the savings.  In order to sell more software, vendors need to find ways to assist their prospective clients in cost justification—something at which many are inept.

These are exciting times for the direct and retail software industry.  There is real change and more choices emerging for your direct business, which will help you to save money and serve your customer better.