Pay Me Now or Pay Me Later
By Bob Boyles, President
Smarter Distribution

Sometimes the old commercials are the best. Who can forget the 1971 Fram Oil Filter campaign with the tag line "Pay-me-now-or-pay-me-later". The idea was that if you spend a little bit of money on maintenance now, you might save a huge amount of money, replacing an entire engine, later. Consulting on system purchases is exactly the same.

It seems that computer purchases have become routine. The hardware that is capable of running your entire organization sometimes seems like a personal computer on steroids and the operating system is not that different than the one you use to run your laptop. The natural inclination is to make the logical jump that the purchase of a new business system (software) that runs on these beefed up PCs must not much more complicated that buying a new PC for the teenager back home.

Over the past several months I have dealt with a number of potential clients that have had this mental approach to buying a new business system. Why should they spend the money on the services of a consultant if what you get when you open up the box with your new computer looks likes exactly like the PC you've got sitting at your desk? The real problem is that what you are buying is more than just hardware and software, what you are buying are the transaction rules and methods that your company will operate under for the next 5 to 7 years, it just comes disguised in a small box. There is not a single more important factor in determining your company's profitability that the methods you use to run your business.

Pay Me Later

The pay me later part of the equation always seems to show up at the worst time. Sometimes the problems begin to show up before the ink is dry on the contract. Here's some real life examples:

The software company sent out their top dog for the sales demo and he did a beautiful sales demo. But, then the guy that shows up to install your system started with the company 3 months ago.

During the sales process you're reassured that "our system does that, no problem". But then the gentleman that's going to lead you through the process shows up with an assistant that just happens to be a programmer to "tweak the code". It turns out that the no problem part was that it's no problem for them to send out a programmer and double your installation bill.

The company promises you standard software, but the upgrade tapes begin showing up before the system is even installed. You go live and have some problems and call their support hotline only to have someone tell you, "oh, you've got our new release, we're still testing that feature."

These are true stories but preventable. The real scary part is that thing that is not preventable. Iif you do not do a good job selecting and installing your new business system then you'll end up paying for that same mistake every single day for the next five years in diminished operating capacity. You'll be sitting there fat, dumb and happy, wondering why margins aren’t what they are supposed to be, never understanding that the root cause of your problems occurred 5 years ago when you decided that system selection was a do-it-yourself chore.

There are numerous benefits that your organization will realize from a properly structured selection process and I'm not just saying that because I'm a consultant. I've worked with hundreds of distribution companies over the past ten years and the number of owners that have come up to me and said "well our problems all started when we bought this system and did a poor job of installing it" has been startling.

Benefits of a Proper Selection Process

A properly run selection process can do some of the following for your company.

Create a common mission for the entire company. During the selection process you'll be asking for input from different levels of the company, making sure that their voices are heard. But this is also a two way street, we're not just asking what's wrong now, we're also informing what's going to be right later. Then when the time comes to install the system no one can sit back on their heels and poke holes in the process because they will have some understanding of the cost and benefits the company hopes to achieve.

Understand the true ROI of a system investment. Often times the budget for a system investment isn’t what it needs to be because the company hasn’t taken the time to calculate the returns. Under the DIY approach the attitude is "we want to spend the least amount of money we can to replace our existing system". The result is a cut-throat contract and an abbreviated installation process. You will probably be able to afford a better system if you took to time to understand all the benefits that can accrue. The labor savings may be obvious, but what about the increased sales potential? Failing to add those in can short change yourself.

Create an opportunity to adopt new practices. The time of purchasing a new system is one of the best for throwing out the old and bringing in the new. When you take the approach that you "we just want to upgrade, we'll do the re-engineering later" approach you'll miss your best opportunity to re-design your business processes. Later the attitude will be "if it isn’t broke, we’re not fixing it".

You'll never get in over your head. Numerous times consultants that are in my part of the business have mentioned that they'll lose a selection customer early in the process only to have them call back and ask for help when it comes time to negotiate a contract with the software company.

Long term satisfaction. The best benefit that you can hope to achieve with a proper selection process is that it sets up a excellent installation process with feeds right into you fully using the system for years to come.

Summary

Spending a few dollars on a second opinion is the cheapest insurance you'll ever buy, the fee is paid once but you'll reap the benefits for the next seven years. Just a fraction of my business is coaching companies through a selection process, the majority is related to helping companies pick up the pieces from when they tried to do it themselves and failed. Just as the pitchman said, you can pay me now or you can pay me later.

About Bob Boyles and Smarter Distribution:
Bob Boyles is the principal of Smarter Distribution in Coppell, Texas, a strategic coaching business focusing on assisting distributors in using technology. He is also the author of "Succeeding With Distribution Technology" a practical how-to guide for selecting and implementing the right technology. You may reach him at (972) 304-1180, via e-mail at bob@smarterdistribution.com or on the Web at www.smarterdistribution.com

© Copyright 2003, Robert S. Boyles Jr. All rights reserved. This article cannot be reprinted or reproduced in whole or in part, without the express written permission of Robert S. Boyles Jr.