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What To Avoid When Choosing A Retail Inventory Management Software

Updated: Mar 17

Choosing retail inventory management software is to be done with careful consideration. There are lots of POS systems available in today’s market. However how do individual retailers decide which one would suit their business the most. Making a mistake in this decision will prove to be costly as there is a huge amount invested in such systems. Let’s take a look at the common mistakes which need to be avoided when selecting a POS system for inventory management.

1. Failure to understand and document current and future requirements

You should know your business requirements thoroughly. Failure to do so may be a costly affair. Unless you understand every process in the business, you will not be able to understand what kind of POS system is suitable for that area. Understanding and documenting every process as per the business need and evaluating the software keeping these in mind is the key. Ask for a demonstration by the software vendor. This will help you to understand the existing features and fitment to your requirements. It also helps in understanding the gaps if any that may be useful to your business. The provider should be able to demonstrate how each process can be automated with the help of the POS system.

2. Not checking customer references

Research well on the customer references of the software vendor. Obtain at least three valid and reliable sources that have used the system. Contact them and if possible or visit them to understand the benefits of the system as well as difficulties they are facing. You need to see the POS system in action before you decide to buy it. Ask them all relevant queries as to how easy would be the implementation, the support provided after installation, the version of the software they are using etc. Do not proceed if you feel that the information is not convincing enough.

3. Not doing your homework

Your homework should be complete. Prepare a questionnaire before embarking on your evaluation and then make sure you have checked all the aspects in the list. Some of the relevant questions are :- • What is the reputation of the company you are planning to decide for the POS system? • How long have they been in business? • Is it a financially strong company or is it a new venture? • What Customers do they have? Do they have a legal trading license? • Do they understand your business (Domain Knowledge)

Many companies will attempt to sell you the Retail management system with the aim of gaining profit for themselves. If you decide not to bother researching about the company and simply trusting their words, chances that you may getting a poor deal is very high. Always go for companies who have been in the market for a longer period of time and those who have a reliable customer base. A financially strong company is what you should be looking for as their responsibility does not end with mere installation of the system at your place. There should be able to do proper follow up and customer service . Do not fall for false promises.

4. Insufficient Training

Not having a strong training plan is another major mistake many business owners make. You may find some of the POS systems being used merely as a cash register due to lack of proper training in handling the system. Your training plan should comprise of the following:- • End User Training [ Ensure that all end users get sufficient training to handle your systems well from all departments ] • Key User Training [Keeping in mind the attrition rate, this can ensure you are self sufficient to handle these internally) • Admin (or) IT Training (Software updates, bug fixes etc are part of the software journey, of you have an IT team, enable them to handle internally with low dependency on vendors. This can improve your organization agile from any breakdowns) • Management Training ( Not just the staff, Management should be trained to use the systems analytical abilities which can help in efficient and quick decision making for business growth) Always get adequate number of staff trained on every detail. Ensure this at the time of installation itself, as it can help the growing needs or when you are short of experienced hands.

5. Compromising on price

Never compromise on price. High quality systems will be costly. You may find several offers for store management systems at low prices. However think of the long run. You need a strong, stable and reliable system which is going to be a strong pillar in the daily routine of the business. Resist the temptation to fall for lower prices as later on you will end up spending more than the initial investment. You may not even get replacement parts for such cheap quality internal components. This will lead the total inability to use the entire system which will prove to be a huge loss. Not Understanding the TCO (Total Cost of Ownership)

A software project has multiple components to get it successfully implemented. POS solution procurement is not just the software licenses. You have to understand both one time costs and recurring costs involved to understand the overall expenses. The following expense heads can help understand the overall costs of the project. • Licenses of the Software • Implementation Cost • AMC for Software • AMC for post implementation support • Customization costs • Integration Costs • Training Costs • Hardware & Infra structure Costs • Supporting Software Requirements and costs • Time of your team

Please try to understand all the above and for atleast a period of 5 years. This will help compare the overall costs and do a good comparison of the softwares.

6. Believing that One Size Fits All Systems

Do not fall for the common trick that inexperienced traders usually use. There is no one size system that will suit all retailers. You need one that is tailor-made for your business. Just because another retailer is using a particular system successfully, it may or may not suit your requirements. So be careful when you buy a product, it is just based on another person’s experience.

Remember that your business depends on the decisions you take .So consider your options carefully before final implementation!

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