Inventory management can be a tedious and time-consuming process that requires both accuracy and a look into the future. The slightest miscalculation can cause a number of issues, including an over-purchasing of stock, inadequate stock, procurement delays, lost revenue—all of which can hinder business performance and lead to unhappy customers. As we know, most small-to-medium sized businesses (SMBs) run on limited resources and therefore resort to managing their inventory manually.
Having the right stock and the availability of that stock for sale at the right time is best achieved by tracking inventory in real-time. While many SMB owners have gotten by with inventory ledgers or Excel spreadsheets, they are often missing out on significant business advantages, such as reduced costs and increased process efficiencies by not optimizing their inventory management.
Inventory management software (IMS) is designed specifically to help companies automate this process and improve their business efficiency. By automating this process, companies cut critical human errors, streamline logistics, establish reliability on available goods, improve customer service and strengthen brand reputation.
While not all IMS solutions are created equally, most of them share similar features and functions. If you’re an SMB owner that’s ready to move beyond manual inventory management, here are a few things to ponder when searching for IMS.
How Much Does It Cost?
The price of IMS solutions depend on what you need for your business. Figure out as best you can what your IM requirements are as you begin your search for the right software. Enlist key members of your team and potential users to get a clear picture to compare against solutions and vendors.
Most IMS today is cloud-based, which cuts down on hardware costs and resources needed for deployment and integration, making the technology more accessible to SMBs. Features include real-time tracking and mobile-enabled access.
Will It Integrate with Other Systems?
Whether or not you’re currently using software to manage your inventory, or if you’re using software tools for other parts of your business, you’ll want to think about the potential need to integrate a new IMS, especially when experiencing rapid growth. Inventory management is directly tied to other parts of the business – accounting, operations, sales – making compatibility crucial. It often takes several software tools to simplify an entire business, even for SMBs.
When talking with IMS providers, it is important to disclose out of the gate any other systems you may be using, whether they’re for accounting, purchasing, warehouse management, eCommerce, or even human resources.
Once you’ve figured out whether your potential IMS plays nice with your legacy systems, it’s time to give it a test run.
How Does It Handle?
Let’s face it; no one likes anything that requires lots of training. Ease-of-use is big factor when evaluating IMS solutions, and there is little way around a learning curve. Be sure to gauge the technology know-how of your team. If the time it takes for each user to learn the basic operational procedures, and controls of an IMS significantly detracts from their ability to do they’re job, then it’s probably not the best solution.
Consider the training needs of future employees as well. It’s also a good idea to appoint one or two “super users” within your company who can act as the go-to ninjas for questions about the software.
Similarly, simple functions within the IMS, such as finding purchase order data or reconfiguring triggers to manage product fulfillment, should be straightforward. There should also be cohesion between tracking inventory, bill of materials, creating work orders and so on. If there’s absence along these lines, look at other IMS options.
Will It Grow with My Business?
Assuming you want to grow your business, be sure to invest in a solution that will scale. There is nothing worse than spending a bundle on software only to learn you will have to do it all over again in the near term. When you think about scaling solutions, ask your short-list of providers about bringing additional locations online, new products lines and sales channels, customizable features now and downstream, flexibility on reporting, analytics, and invoices.
There are literally dozens if not hundreds of IMS solutions on the market today. Like a restaurant menu with too many options, this can be overwhelming. Keep in mind that each IMS has different features and performance capabilities, but most of them are comparable at a base level.
When applying these few points to your IMS evaluation process, you will find the path to selection easier.
Arun Upadhyay is the founder and CEO of LionO360.