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Optimizing Software Vendor Partnerships
Whether they come by phone, fax or e-mail, solicitations from technology vendors are constantly trickling into distributors’ offices. Most offers make big promises (It will make you money! It will pay for itself in a week! It will revolutionize the industry!), but they don’t always deliver. These too-good-to-be-true deals can overwhelm a business owner, particularly one who isn’t tech savvy.
“I think distributors realize they need technology, but they have trouble making decisions about what to buy,” says Jim Deal, marketing director for Paper Chemical Supply in Savannah, Ga. “It’s very easy to get confused by all the offers and presentations.”
Before investing in any new technology, savvy distributors protect themselves by keeping informed on current trends, conducting independent research and aligning themselves with reputable vendors.
The safest way to make sound technology investments is to partner with a vendor you trust. It is possible to find a reputable company through an advertisement or mailing, but the best bet is to turn to your peers for help. Ask for referrals through trade associations, marketing organizations or other networking groups.
Always check the references of any company you are considering. Ask their customers not only what they like about the company, but also what problems they encountered and how those issues were resolved.
If you don’t use industry sources to find a vendor, be sure to ask the company what experience it has with the jan/san industry. Christopher D. Nolan, president of H.T. Berry Co., Canton, Mass., gets at least one call per month from new technology companies, but many of them have little or no understanding of what his business does.
“There is a little bit of a specialization in our industry,” Nolan says. “We want someone who has at least some understanding of our needs because they are specific. There are a lot of distribution software companies out there, but not all distribution is the same.”
Rick Silber, president of City Group, Jessup, Md., agrees that the most important thing to keep in mind is that a vendor’s claims mean nothing if the software doesn’t enhance business. Silber places great importance on ease of use and continued support.
“We wanted something that we could take right out of the box and run with it,” says Silber. “They had packages off the shelf that were very compatible with what we do.”
The software that City Group utilizes contains several features that the company doesn’t use, but may be beneficial to business operations in the future.
“Whenever we need something, we can call up tech support ... and it seems like that support is always blossoming and opening up new avenues for us,” Silber says.
Armed with background information about a vendor, you can have some peace of mind about your choice. While good referrals are important, they are not enough to create an instant bond and deep level of trust between vendor and client. That happens over time.
“It’s hard to develop trust with someone new,” says Ron Attman, vice president of Acme Paper & Supply Co., Savage, Md. “You can check their reputation with other people they’ve dealt with, but the way anyone develops trust is to have an established relationship.”
Trust is a two-way street. A vendor must do its part to establish a strong bond — starting from the beginning by always being pleasant, honest and helpful.
Paper Chemical Supply knew it had found the right match when the owner of its new vendor went the extra mile to personally thank the distributor for its business.
“The owner happened to be in the area and came by to visit us right after we got started,” Deal says. “Prior to that, our telephone conversations were very comfortable, but that unplanned visit created a comfort zone with us.”
Likewise, you must do your part to create trust. You can do so by laying out your expectations for the vendor from the start. Whether your goal is to increase sales or to reduce inventory, be clear with your potential technology provider.
Also, let them know if you are looking to simply update your technology or if you are ready to make radical changes. Forcing a vendor to play a guessing game will only lead to disappointment on both ends.
“We have developed a strategy to be very specific in outlining what our needs are, starting with our initial communication,” says Nolan. “We tell them what we’re trying to accomplish and ask them to address that specifically. If they understood it and answered it with the technology, that helps us develop trust.”
Keep An Open Mind
Just because you have a strong bond with a particular vendor shouldn’t mean that you should rely on them completely or trust them unconditionally.
“We’re satisfied with our vendor and have a sizable investment with them, but that doesn’t mean we won’t look at other companies,” Deal says.
In fact, in the last year Deal reviewed the offerings of two other technology companies. Although he didn’t switch vendors, Deal says the exercise was beneficial because it verified that his company is on the right track with its current provider.
Also, distributors should constantly learn about new products, even if the hardware or software represents a big change. Technology is an important business tool, but one that can become outdated quickly. If your current provider — or a new-to-you vendor — has a new product that could improve how your company operates, it is worth a bit of your time to listen to the sales pitch.
“Vendors create new products for a reason — they believe there is a market for it,” says Natalino Scappaticci, manager of Allied Eagle in Detroit. “You have to be open minded and not be quick to react to something new just because it would change how you operate.”
Although Acme Paper & Supply doesn’t give audience to every software vendor that approaches, the company is always willing to hear about relevant technologies that promise to boost the bottom line. In fact, the distributor recently implemented a new — and improved — routing and tracking system for its trucks after learning about it from a current vendor.
“They called us and said they wanted to talk about it so we listened,” Attman says. “We know those things are out there, but we like to wait until they are proven before we go chasing them.”
Verify, Verify, Verify
Of course, every new offering won’t be a perfect fit for your company. Before scheduling a presentation, Michael Clarke, president of JC Paper in Fremont, Calif., asks vendors to explain how the technology would improve upon or add to his current system.
“If their answer seems logical and valuable, then we ask for a live demo, usually at one of their customers’ sites,” Clarke says. “If their offering still seems valuable, we ask for several references that have similar operations as ours.”
When it comes time to test out new products, be sure to rally the troops. Let the staff members who would be using the new software or hardware test out the product and then consider their input.
“We believe in a complete buy-in from the top down,” Clarke says.
If the product passes muster with end users — as well as the IT manager — then it’s time to involve key senior managers, who must evaluate the potential return on investment and make the final decision.
“One of the ways that I determine return on investment is whether we are able to do more with the same amount of people, or possibly less,” says Silber.
Unlike many purchases, technology products aren’t always easy to evaluate based on a simple cost vs. return formula. Beware of vendors’ claims about the bottom-line benefits of a product.
“Vendors are going to paint a rosy picture when they give you that information,” Attman says. “Listen, but take it with a grain of salt. No one can say with a degree of certainty that this product will reduce overtime by 30 percent and it’s going to save you enough money to pay for itself in ‘X’ months.”
Before buying, try your best to determine the amount of time a particular technology will save based on real-life testing or on the experiences of others who have used the product. Calculate the price tag associated with those labor savings and compare that amount with the initial cost of the product. If the product will pay for itself in a year or less, it’s probably a safe bet.
Unfortunately, it’s not always possible to make such calculations. Last year, H.T. Berry spent $75,000 on software upgrades, specifically its Web site and budgeting tools. While Nolan is certain the changes will make his company more efficient, he doesn’t need a big return on his investment to justify the expenditure.
“We’re not looking at our software alone to increase our sales 20 percent a year,” Nolan says. “That’s not its job. Its job is to create operational efficiencies and our job is to make money.”
Becky Mollenkamp is a Des Moines, Iowa-based freelance writer and a frequent contributor to SM.
|Raising Red Flags |
While most technology manufacturers are honest brokers, there are some companies that are simply looking to make a quick buck. To avoid falling prey to the bad guys, watch for clues that something is fishy.
• Bad manners: Avoid companies that are pushy from the get-go. When a sales person is fixated on price, it’s probably because they don’t have much else to offer. “When they come at you with price only, there’s no depth to what they are selling,” says Jim Deal, marketing director for Paper Chemical Supply, Savannah, Ga. “What will be the service that comes with it?”
• Unrealistic promises: You’ve heard it a million times — if it’s too good to be true, it probably is. Be wary of companies that make wild guarantees, especially if they are unable to back them up with proven results. “You want to see that they’ve been successful and verify that they can do what they say they can do,” says Ron Attman, vice president of Acme Paper & Supply Co., Savage, Md.
• One-size fits all: “If the solution does not make sense for your company, that’s the biggest red flag,” says Natalino Scappaticci, manager of Allied Eagle, Detroit. A salesperson who doesn’t address your specific concerns from the beginning (when he should be putting his best foot forward to win your business) probably never will.
• No demos: Rick Silber, president of City Group, Jessup, Md., doesn't pay attention to the claims of vendors — rather he evaluates how a solution will help his company. A “weeding“ process can shed light on vendors that just won’t mesh.
His company chose three vendors it believed could provide the solutions the company needed and made an evaluation based on the presentation. “There was one who talked about a whole lot of things, but couldn’t produce anything,“ says Silber. “We eliminated them right away because they didn’t have a demo. I’m thinking, what kind of support are we going to get from this company after we install this thing?” — B.M.
Activant Upgrades Trading Partner Connect
Activant Solutions Inc., Livermore, Calif., recently launched the Trading Partner Connect version 11.0, the newest version of Activant’s Internet trading network that allows membership for distributors not using an Activant solution. It is available at http://www.distribution.activant.com.
New features for version 11.0 include: enhanced EDI mapping functionality; translation of all existing and future inbound, hub-supported EDI documents into human readable form; automatic rationalization disabling; an interface and mechanism that gives traders flexibility to remove dead stock; and Web site redesign.
ASTM Releases Digital Version Of Library
ASTM Intl., West Conshohocken, Pa., a voluntary standards development organization for materials, products, systems and services, recently launched a new digital version of its entire library of technical information. The ASTM digital library is available at www.astm.org.
The information repository enables users to access nearly all ASTM literature. The online resource includes technical publications, manuals, journal articles; and papers.
Users of its digital library will find a self-service environment that allows them to locate a few articles or chapters, an entire book, or the entire library related to a particular topic.
A Different Perspective
While the products section is a popular destination on www.cleanlink.com, users can also benefit from the information provided in the “Suppliers Perspective” page.
Filled with case studies and white papers from the industry’s manufacturers, this page is a good way for distributors to keep abreast on the information — not just the products — provided by manufacturers.
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