July 24, 2019

Expectations vs. reality when implementing a new inventory system

Thinking of a new inventory system? Here’s the truth of what to expect.

Every business has all sorts of expectations about their move to a new inventory system.

And unfortunately, there are plenty of businesses whose expectations just don’t match up to reality.

We’re going to look at the three main areas of any new project – the costs, the time, and the process – and compare a few misguided expectations against the realities of each situation.

1. The Costs

 

Here’s the expectation:

“We want a fully customisable, bespoke inventory system that’s built from the ground up to fit the precise needs of our business. We’ve got a budget of £5,000 – that should do it, right?”

 

And here’s the reality:

A bespoke inventory system that’s fully customisable costs hundreds of thousands of pounds.

We’d love to live in a world where every business has buckets of cash to spare. But we all know that’s not the world we live in.

You need to be realistic about your own budget. And in most cases, a bespoke inventory software system will be far beyond the means of the average SME.

Most businesses will instead choose an off-the-shelf inventory system, and get the help of a consultant – like us at BlueHub – to guide them through their implementation.

You’ll get a fantastic piece of inventory software that’s reliable and packed with features – but you won’t be able to customise it as much as you might like.

 

What kind of costs can you expect?

If you’re looking for an off-the-shelf inventory package that’s implemented by a consultant like us, you’ll be looking at two main areas of expense: the cost of the software, and the cost of the consultant.

In most cases, inventory software for SMEs will be a monthly subscription – anywhere from £100 a month to a few thousand per month.

And for an implementation project with a consultant, the main project could cost something in the region of £7,000 to £25,000.

That might seem like a big chunk of your budget – but that’s a figure that covers:

  • Setting up your software
  • Implementing your software
  • Training your staff
  • And your ongoing support.

It’s also important to remember that this is a cost that’s spread out over the course of several months. A typical project at BlueHub takes between 2 and 6 months to successfully complete – which should help to take the strain off your cash flow!

 

So what can you do to help reduce these costs?

There are two main choices our clients can make to help bring the cost of their project down towards the lower end of the scale (closer to £7,000 than £25,000).

First, you can choose to get your staff trained online, rather than on-site.

And second, you can choose to bring your old data onto the new system yourself – rather than outsourcing this data migration to a consultant like us.

 

2. The time you’ll need to invest

 

Here’s the expectation:

“It’s just a new piece of software – the project should only take a few weeks. And we’re hiring a consultant to do the work, so we shouldn’t need to be involved much at all.”

 

And here’s the reality:

A successful implementation project for your new inventory software could take anywhere between 2 and 6 months.

There’s no getting around it – you simply have to be realistic about the amount of time involved.

That’s the total time for the project. But what about the amount of time your own company will need to put in each week?

In the earlier stages (while your consultant is setting up the system), you won’t need to invest too much time as a client.

But when it comes to data migration and staff training, you and your teams will need to be prepared to devote at least a small portion of your working week to your project.

 

So how much time does the training take?

As a general rule, you’ll need to devote a minimum of 4 hours’ training per user to get them to a level where they’re comfortable using the new software.

And for any of your employees who need to master the software, you’re looking at a minimum of 8 hours per person.

For on-site training, you’ll usually need to allow 2 working days (16 hours) for a typical visit.

 

3. The process itself

 

Here’s the expectation:

“We’ll get a bit of training for our staff and then just pull the data over into the new system. We’ll be able to figure things out as we go along.”

And here’s the reality:

Training alone isn’t enough – and neither is just moving your data.

Before you do anything with your new inventory system, you need to make sure that it’s the right move for your business.

You’ll need to check that the system can do everything you want it to. You’ll need to test a sample of your current data in the new system – and when you import that data, you need to make sure you’re taking advantage of all the data fields in that new system.

Why? There are two important reasons:

 

1.     The average implementation takes 100 hours or more

Are you really going to invest that level of time and resources into something that’s untested?

Would you be happy to discover that your team has wasted all that time and money – and that they now have to backtrack and correct huge errors or rethink their entire approach?

 

2.     Being careless (or rushing in) will get you in trouble with HMRC

We talk to plenty of businesses who come to us thinking that they can leap straight into a new inventory system and skip over all of the important precautions and tests.

We also talk to plenty of businesses who have already done exactly that before they come to us.

And what did they find?

Their accounts were full of nonsense figures. Their data fields weren’t filled out correctly, and they had rounding errors that they couldn’t account for.

And when it came time for their quarterly returns, they realised they were in trouble. They had to pay for emergency meetings with their accountants to fix the mess they’d landed themselves in, and they put their businesses at risk of receiving penalties from the tax office.

 

So what do you need to know?

While there’s no one-size-fits-all approach that works for every business, there are some general rules of thumb that you should be aware of.

If you’re looking at your options for a new inventory system for your business, here’s what you need to keep in mind:

  • Truly bespoke systems cost hundreds of thousands of pounds – for most businesses, an off-the-shelf system that’s implemented properly will give you everything you need
  • An implementation project takes between 2 and 6 months – and you need to be willing to get involved when it comes to data migration and training
  • Preparation and testing are important – unless you want to land yourself in trouble with HMRC!

By now, you should have a good idea of what to expect from a move to a new inventory system. So if you’re ready to talk to a no-nonsense consultant that can help you set realistic expectations, get in touch with one of our experts and tell us what you need.

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