Out of the Box versus ERP software – Why the gap?

Out of the box solutions are affordable because the developers have been able to distribute such high volumes of their software creating a true economy of scale and thus the reasonable price. The challenge with these packages whether online or installed is that there are restrictions in the scope and customisability of their functionality especially as your business grows.....

We often engage with clients that have grown up on MYOB, XERO, SAASU, Quickbooks and many other out of the box accounting/inventory/payroll systems. To be honest, these products are fantastic value and they offer functionality that would cost you an arm and a rib if you had to have them developed specifically for you. The reason they are affordable is that the makers have been able to distribute such high volumes of their software that there is a true economy of scale and thus the reasonable price and annual update fees. The challenge with these packages is that there are restrictions in the scope and customisability of their functionality especially as your business grows.
Out of the box Software

Let’s look at a few scenarios:

A retailer decides to sell wholesale too

As a successful retailer, you have decided to start wholesaling your product too, to help increase stock turns. Your tax advisor has suggested you set up a separate entity! That’s, not a big deal you say, and set up another set of books with your existing out of the box accounting package! Your rep goes out and sells goods, exciting stuff! Now you have to create an invoice in your retail company and “sell” the stock to your wholesale company before invoicing this to the customer. This starts to worry you as you identify the massive amount of administration effort this is going to take (and cost), how do you solve this?

You run 4 separate websites

You run 4 websites. Your success is on the horizon and you are taking around 50 orders per day per website. Your team log into each website each day and download the orders. You have to separately log into your freight management system and key in the delivery details of each customer, this is horrendous how much time is taken to print orders, pick, pack then find the matching freight delivery sticker for each order. The labour is costing you so much, you are losing money and each week is becoming a nightmare as you try and work out what stock you have sold so you can reduce the stock via a sales invoice from your existing out of the box accounting package, how do you solve this?

The stock range has grown

Over years your stock range has increased, you have taken on a second bigger warehouse to accommodate your greater range and volume of  stock. Now orders are coming in from your customers and your warehouse staff relies on their memories to find and pick stock. And a new shipment has come in recently, a casual forklift driver has put it away, but she is not there today.  Your team walks around wasting precious time searching for the stock. Unable to find it, the purchasing manager orders another consignment of goods.
You can probably see some of the problems coming out of this. Which warehouse is carrying what stock? How does the purchasing manager know when to replenish? and how can the stock picks be sped up? The list goes on….

Out of the box solutions can only address parts of the problems businesses encounter. There is a certain degree of integration available between websites, warehousing systems and accounting systems, but its often not true integration, rather the pass through of some but not all key data, and this is where ERP systems comee into play. They are highly sophisticated, configurable and customizable systems that can be tweaked and modified to meet virtually any requirement a customer can think of, the only restrictions being cost! What are your restrictions?

About the author: Mark Freidin is a retail and digital transformation consultant that has worked both on the client and developer side and understands the delicate communication required between customers seeking solutions and development teams