5 Things to Know Before You Speak with Distribution Software Vendors

Evaluating software is a time consuming and resource-laden task.  With so many options in the market, it can be difficult to narrow down your search and distinguish between all the systems available. When you do finally create a list of potential distribution software systems to evaluate, you must then dedicate hours of time to actually speak with vendors and watch demos in order to make a decision.  Although the search process will always require significant work, to make conversations with vendors as productive as possible, do your homework beforehand. Many distribution type businesses will require similar functionality, however, it is important that you have a good understanding of how your company operates in order to have meaningful conversations with each vendor.  What might be an obvious piece of functionality or requirement to you, could be unique to other distributors in the industry.  The more information you can provide each vendor upfront, the easier it will be to narrow down your options throughout the process.  The right vendor will spend the time to get to know you and your company in order to make their own assumptions about whether or not the system will be the best fit for both parties.  You want to find a vendor who has experience working with distribution businesses, but also spends the time to learn about your specific requirements and processes.  In order to best prepare ahead of time for each software discussion, consider the following:

Number of Users

Certain introductory systems set costs and limitations based on transaction volume, number of workstations and data file size, however, as you begin to look at middle-tier software these restrictions and cost structures no longer apply.  Instead, distribution software vendors will quote a price based on the actual number of employees who access the software and required functionality.  However, in order to determine how many user licenses you need to purchase, it is not as simple as just counting those who access the software.  Instead, you must also take into consideration the ways in which each employee will interact with the system. Are some users sales reps who travel out of the office? Are some users people in the warehouse who pick, pack and ship orders? This information is important to consider as certain vendors will have different user licenses available depending on the functionality and system access required.  Alternatively, certain vendors will also offer specific functionality designed for certain types of users, such as travelling sales reps.  For example, many distribution businesses employ outside sales reps on a contract basis.  In this situation, these reps may only require access to inventory information and the option to enter orders from the field.  A company may also want to specifically restrict these reps from accessing the full distribution system, in which case functionality such as an online order portal would work instead. This will, in turn, reduce the number of users who require a full license to the system.

Sales Channels

Many distribution businesses who historically only sold product through their in-house or outside sales team are taking advantage of selling through multiple sales channels, such as eCommerce and through retail showrooms, both to the end consumer and to other businesses.  It is important to know what sales channels your business utilises and the volume of orders per channel, to better determine what functionality is most beneficial in a distribution system. If you sell online through your own website or other marketplaces like Amazon, consider distribution software that provides integration with each website.  This will allow you to share information between the two and reduce manual processes.  If you sell product directly to customers who visit your location, consider implementing point of sale software in order to create orders and accept payment.  However, this is where order volume is also an important metric to know.  If the volume of customers who visit your location to place an order is fairly small – do you need a full point of sale system or can you enter each order directly into your distribution software? Do you need to be able to accept payment for these orders or will they get entered on account?

Number of Locations

Another important factor to consider when you speak with software vendors is how many locations the business has.  If you have multiple locations – do these all operate the same? Some distribution businesses will have multiple warehouses and might even have their own brick and mortar retail stores.  In the case of multiple locations, are they owned by the business, or are they third party logistics companies? Does the company transfer inventory between the locations? Each of these factors will play a role in finding the right distribution system.

Preferred Deployment Method

When implementing distribution software you will have to decide between a cloud-based or on-premises deployment. If you have a preference, this can help narrow down your search in the beginning as certain vendors will only offer one option. If you do not have a preference going into discussions, make sure you do some research beforehand on the pros and cons of cloud vs. on-premises software.  Cloud-based solutions are typically based off of an on-going subscription model whereas on-premises solutions usually require a large upfront investment.  Certain factors can help aid in making the right choice about deployment such as budget, available IT resources including personnel and infrastructure, internet access and physical storage space.

Reasons for Shopping

It should be fairly obvious that before you start searching for new distribution software you need to have a valid reason for doing so, but this is not always the case. A clearly defined motive for finding new software will aid in making the best decision and provide a way to measure ROI once a new system is in place.  If you want to automate processes and save time, make sure you know how many hours of work are currently dedicated to manual processes. If you want to reduce the use of paper in the warehouse, know how much is currently being used and in what capacity. A clear picture of the pain points and opportunities you wish to address with new software will help keep the search a priority so that you find the right system within a reasonable time frame.

It is important to consider all of the above factors before you start the search for distribution software in order to make the most of your discussions with software vendors.  Of course, there are several other factors that you will want to also address right away, especially if your business has specific unique needs.  This can include the need for the system UI to be available in multiple languages, specific functionality such as lot tracking and catch weight, and remote access. Be sure to ask vendors about specific requirements, and never assume they will have the functionality you need built right in.