Interactive Workshop Helps Attendees Simplify the Vendor Selection Process

On June 17-18, Catalog Success and F. Curtis Barry & Co. co-presented the first Evaluating, Selecting and Implementing Direct Commerce Systems interactive workshop in Richmond, Va.

The success of this intimate event — we drew 50 percent more attendees than we had planned on — represents an exciting, fresh beginning for both of our organizations, one that could easily lead to greater rewards down the road for us, and most of all, for attendees.

For this edition of The Corner View, I asked Curt Barry to give his expert synopsis of the key issues that were addressed during the conference. As he points out, much of the two-day session was devoted to the changing vendor landscape and the functionality attendees wanted most. Here’s Curt’s take on some of their challenges and highlights.

Single System
“I can’t believe there isn’t one system that fully integrates everything and supplies,” was the mantra among many companies. Everyone wants this to be a reality. Enterprise resource planning vendors will try to convince you this is possible with their systems. While they’ve made some inroads into the direct industry, the best way to be totally sure is to do detailed systems requirements and develop a request for proposal (RFP).

Then match off the RFP requirements to vendor responses, results of demonstrations and other matters relevant to a contract. This is the only way to see what the application fit is.

A representative from a large multichannel marketer in attendance said that his company was selecting key vendors and working solely with them to service all the brands in the enterprise. Best of breed is probably a reality for this operation.

Software Partnerships
A positive solution to not being able to develop all functionality into a single system is that e-commerce vendors are developing partnerships with accounting and finance systems, retail store systems, address verification, warehouse management systems for larger businesses, business intelligence, and others. At risk is that they may not be designed to be integrated together. So it may not be as seamless as you’d hope.

Retail
Many companies are either experimenting with retail stores or have at least a store or two to liquidate overstocks. Software companies such as MICROS-Retail, Junction Solutions and Escalate Retail (Ecometry) are capable of the large chain store operation functions through their parent companies’ products. Projects are underway to integrate functionality.

The key today is how integrated the retail functions for marketing, merchandising, store operations and warehousing are. Other vendors have developed partnerships where a smaller number of stores can be supported.

Multiple Location Inventory
A number of companies talked about needing the ability to track multiple location inventories. For the larger companies, this functionality needs to handle multiple warehouses with the same SKUs. Business rules must address which warehouse will fill customer orders and how to handle split order availability — namely, the inability to ship complete from the warehouse nearest the customer.

For smaller companies, multiple locations are also a reality where bulk stock may be held off-site from the main fulfillment center. Multiple locations (both bulk and forward picking) are needed in large and small companies.

Drop-Ship Merchandise
Items offered from drop-ship vendors are increasing at a rapid pace in many companies. Many e-commerce companies have relationships with their key product vendors to have them ship directly to customers. Some of the companies in attendance said they’ve developed their own systems to download customer orders to vendors and send confirmations back upstream to the retailers’ customer service files.

Several other companies said they’re pleased with the drop-ship vendor capabilities that VendorNet provides. Drop-ship merchandise is a great way to expand your merchandise offering with minimal inventory cost if you can make the operations seamless between you and vendors.

Total Cost of Ownership
While the vendor provides pricing for its licenses, hardware, software and services, it probably doesn’t reflect the total cost of ownership. It’s not that the vendor is deceptive. It’s that projects take longer to implement. Training takes longer; other terminals and servers need to be replaced to take full advantage of the system. With the advent of Software as a Service (SaaS), now companies need to do their financial due diligence to see whether SaaS or in-house licensed products makes the most sense.

Return on Investment
Most CFOs want to see their investments yield an ROI in 18 months to 24 months. Companies are having difficulty coming up with savings. But it is possible. You can realize savings from warehouse personnel and barcoded inventories, all while providing information systems that companies need to grow their businesses. For example, overstock identification systems, among many others.

There are many intangibles to implementing new systems. But we have to work harder as an industry to identify the ROI. The user community must lead this and give buy-in to the project. One area companies brought up is that their IT legacy systems are aging technologies that don’t allow them to integrate to other new generation technologies and services.

Longer Implementation Times, Higher Costs
From my experience, about 40 percent to 50 percent of the IT projects are underestimated, and many aren’t delivered within the original time frame. This seminar went through detailed steps to help companies select and implement the right system for them.

Clearly, many people walked away with the understanding that the user community and IT need to be challenged and accountable to do a lower level of planning and a more disciplined job in controlling and managing the project.