Wednesday, March 23, 2011

The pivotal role software can and should play in small businesses

Now you've probably guessed by the name of my blog or by the title of this post that I think software plays an important role for small businesses. Well you're right but you might not believe how much importance I convey to it.

Just to clarify, when I talk of software I'm not simply talking of those out-of-the-box solutions like your word processor or your anti-virus solution. I'm talking about management software, custom sotware, online applications, email clients, web sites, social tools, mobile applications, desktop applications, electronic documents, databases, spreadsheets, operation systems, etc. To better picture this, simply imagine anything you ever do that has to do with computers in a professional and personal context and eliminate the hardware part. Now you get it!

In today's reality most business domains have at least some software presence. Whether its for minimal use such as email or web browsing or more extensively with business management software such as client, order, inventory and product management; most businesses depend on software.
Software solutions are often perceived as independent tools to accomplish particular tasks (such as the ones previously enumerated). Though this is the case, software solutions should rather be seen as business tools that mold to your business processes.

To better illustrate this let me take you back a long, long time ago when Shipment Companies did not have software. Their simplified process would go something like this:
  1. Client calls Shipping Company and asks for merchandise delivery from point A to point B
  2. The Shipping Company prints a shipping document (a 4 carbon copy document), calls a driver to come and pickup the document. One of the copies is kept in a marked folder.
  3. Once the driver arrives, the Shipping Company hands him the shipping document.
  4. The driver goes to point A, takes the merchandise, has the person at point A sign the shipping document and hands him a copy of the document.
  5. The driver then goes to point B, delivers the merchandise, has the person at point B sign the shipping document and hands him a copy of the document
  6. The driver then goes back to the Shipping Company and hands the remaining copy with everybody's signature to one of the clerks.
  7. The clerk then takes the signed copy and puts it in the same folder as the original client-copy. The folder is then transferred to accounting where a bill would be written up, sent by mail and the bill entry would be written in the accounting books.
  8. Once the cheque is received, it would be deposited and the payment would be written in the accounting books to end the process.
Now compare this with the way, modern automated shipping companies handle shipments:
  1. Client asks for merchandise pickup from point A to point B online. On the website the client gives his payment information.
  2. The Shipping Company's software determines the most appropriate driver for the delivery (according to the delivery route and the driver routes) and automatically updates this drivers route. The driver can see this information on his onboard GPS software.
  3. Driver goes directly to point A (does not have to stop at the Shipping Company), takes the merchandise, has the person at point A sign electronically on his mobile device and can either print a copy on the spot or an email can be sent directly to a person to point A as a proof of pickup.
  4. Driver goes to point B, delivers the merchandise and has the person at point B sign electronically on his mobile device. He can then either print a copy on the spot or an email can be sent directly to that person for proof of delivery.
  5. As soon as the signature is imputed, the Shipping Company's software will send a bill by email to the Client, the payment will be taken from the payment method previously entered by the client and the bill and payment entries will be automatically transferred to the accounting software
I think you can probably imagine what the benefits are here but let me just go over a few of them:
  • Simpler Logistics: There are less steps in the modern software version than with the paper version. Furthermore in the Software version steps 2 and 5 are completely automated.
  • Less manual errors: Can you imagine how many things can go wrong in the first scenario? What if the driver loses one of the copies, forgets to have a client sign, accountant enters wrong information, etc.
  • Easier access to information: Every step of the way, the current status of the shipment is available through the software. There is no need to wait for the return of the driver to know what the progress is.
  • Time economy: The fact that the driver does not have to stop at the Shipping Company, the fact that the most appropriate driver is chosen, the fact that the driver does not have to go back to the shipping company to hand in the signed document, the fact that there is no need to wait for the payment, etc. All of these are very substantial time economies. Now scale this to the number of deliveries made in a year...
  • Cash Flow: The payment is taken from the credit card or other electronic payment method as soon as the shipment reaches its final destination. This makes the money get in your account quickly.
  • No collection problems: You won't need to remind your clients for their payments, find ways to get the late payers, etc. Since all is automated, you can guarantee that the payment will be made when it needs to be made.
  • Paperless: We are in an environmental friendly society (cough). Every way to save paper is welcome.
  • Customer Service: The customer service is greatly improved for the clients can easily make their orders, track their orders, validate their payments, etc. This results in less calls that need to be handled by the customer service helpline.
  • Profitability: Why am I stating this one last, since it's the one you care most about; because all the previous points will result in a more profitable service. Other profit factors are: less fuel expenses, less driver fees, less customer service fees, less administrative fees, etc.
I could probably go on but I think you get my point. Now, I obviously took two extremes to prove my point. Many shipping companies will have some kind of software but may not be fully automated.

Now for those thinking: “What's this jerk talking about, I don't have a shipping company?”, well maybe not but can you try to imagine how your business would be like (whatever it is) if you could automate the maximum of tasks in it. Can you apply the benefits mentioned above? You probably can.

So what does this all mean? How do you figure this out? You realize you probably need appropriate software solutions but you don't know which ones to choose. Through this blog, I'll try to give you specific measures to figure out how to choose your software but until then, if you can't wait, find a software specialist, ask a logistics expert... anything but do something. Make sure the software solutions are right for you because otherwise you're losing out on the potential of your business.

1 comment:

  1. The software you use for your business should be the best. Small businesses can actually start with open source software.

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