Today’s back office solutions have a core set of features and range of ancillary capabilities, but because of time constraints and a resistance to change, it can be easy for users to stick to the core features while not explore the additional capabilities that can catapult your business to the next level.
“Petroleum marketers want systems to streamline their ordering and reconciliation processes,” says Bruce Bates, vice president of sales and marketing at PDI. “Bill-of-lading confirmation and invoice reconciliation for fuel purchases can be extremely labor intensive. Today, systems should be highly integrated to the supply chain to facilitate the importing and auto-matching of book values to actual.”
As Bates explains, in the area of convenience retail automation, a centralized price book integrated with the POS, computer assisted ordering, price book and invoice integration with vendors, as well as handheld automation, all play key roles in today’s back office environment.
“When retailers are initially selecting a back office solution provider, they focus on three key basic areas,” says Melissa Fox Hadley, retail solutions manager at The Pinnacle Corporation. These include the price book—the solution for maintaining the item catalog and facilitating POS scanning; the manager workstation—the back office solution that store managers will use to reconcile their daily paperwork for sales and cash, fuel inventory, and merchandise inventory; and the home office audit—the centralized solution for analyzing and editing store daily data before it is posted to the GL.
However, as John Redmond, vice president of strategic product development at ADD Systems, explains, the real return on investment of any computer system is typically beyond the core.
“It is important that the core of any system be stable and provide a core foundation of features and benefits. ADD Systems currently supports over 600 petroleum marketers across North America,” Redmond says. “Our products are rich in features and options and those companies who have pushed our products beyond of the core are typically the most satisfied and have derived a higher return on their investments with us. Those companies have used technology to gain competitive advantage within their markets.”
For example, as Redmond explains, gasoline is still important but in-side store sales drive profits. “Fully implementing the ADD eStore Price Book helps drive merchandise profits,” Redmond says. There also has been a historic push back within the industry regarding route optimization technology and the nuances found within this component of back office systems.
“More companies have been open to implementing technology which can assign deliveries to trucks and drivers and provide an efficient turn by turn route,” Redmond says. “ADD Systems offers an end-to-end solution in this area. Delivery stops can be assigned, optimized and automatically pushed out to our on-board Raven truck computer system. The end result can be reduced mile driven and increased stops per hour and gallons per hour.”
According to Herman Beckley, convenience store product manager at Retalix Ltd., the “hidden gems” that are often overlooked in back office solutions are likely features that yield hard dollar savings, create sales uplift or reduce shrink.
“For example, linking of cigarette buy-downs to the cigarettes as negative plus is a trick that a good back office application should be able to track,” Beckley says. “This ensures that sales are used to validate the vendor rebates that are usually calculated on purchases. Also, linking of the back office's electronic journal to the video camera system will enable managers to quickly search for issues, and then jump right to the video of any questionable transactions. This can really help reduce shrink once cashier realize that everything can be tracked by the manager.”
As Beckley explains, if the back office can report sales of items that have negative inventories, then you know that something is wrong with the ordering/receiving processes. “Errors in these processes usually are the cause of item out-of-stocks. Fixing this problem will yield immediate sales uplift,” Beckley says.
The Pinnacle Corporation offers some key advanced features that many users may not be aware of. These include:
• Lottery Tracking – Tracking of instant lottery tickets at the store to ensure that instant ticket inventory is being accurately accounted for.
• Exception Management – Mistakes can happen when entering data. Data is miss-keyed, forgotten, or sometimes even intentionally misrepresented. Using an exception management system to cross check business rules against actual entered data is important in ensuring that these mistakes are caught immediately.
• Computer Assisted Ordering – Thousands of dollars are spent on equipping stores with POS systems, implementing scanning, and training personnel to accurately capture sales data. CAO simply uses the transaction sales data that is already being captured. The labor costs associated with the manual ordering process are considerably high and can be greatly reduced when using a CAO system.
• Advanced merchandising strategies including combos and mix-match, and promotions; as well as providing for operational control of things like sales restrictions, linked items, age restrictions, day-time and tender restrictions.
Fox Hadley says that back office users need to determine what areas beyond the basics you need help with, and where you would like to improve your overall efficiency and of course your profitability.
“Ask questions and gather information. Other retailers, share groups, vendors and suppliers are all good resources for getting help and finding out what your options are,” Fox Hadley says. “One of the most important things to think about before embarking upon a project to implement any new solution or advanced feature is what tasks you’ll need to add to get buy-in within your own organization. Many times the hard part is about learning and implementing new disciplines, new processes, and company cultural shifts that will need to take place in order to make these new additions a success.”
One of the key features of PDI’s system is the flexibility and ease of creating new import profiles to feed the fully integrated cash management and item reconciliation modules.
“By taking advantage of these features, customers are able to easily reconcile bank to book transactions electronically,” Bates says. “This easily saves four to five days in the period closing process.”
About fifteen months ago, PDI put a customer portal in place called PDI Connections. This web site allows PDI’s customers to collaborate with one another as well as interact with subject matter experts from PDI.
“This knowledge sharing allows our customers to more fully understand use case scenarios for the various modules,” Bates says. “Our annual PDI Users Conference typically brings more than 300 customers to learn about new features, or the features we believe may be underutilized. This year we are offering 37 different classes over five different tracks.”
The benefits of taking the time to really go beyond the core functionality of your back office system and explore other capabilities is paramount.
A customer of PDI recently stated, “We’ve mostly eliminated manual entry of any kind. Now we’re importing all beer invoices, grocery wholesaler invoices, fuel invoices, EFTs for fuel vendors, beer vendor EFTs, notes payable invoices, and other miscellaneous invoices into relevant modules of PDI/Enterprise. When we consider how fuel invoicing alone required the attention of a fulltime person, and now we do that in a few minutes every day, it’s just amazing.”
Fox Hadley says that implementing advanced features beyond the basics can greatly improve labor hours. “Take computer assisted ordering (CAO) for example, without it store managers will spend hours walking around the store and filling out order sheets,” she says. “By using a CAO solution and the data you are already collecting, the store manager simply pushes a button and lets the application do all the work. And it’s more accurate too. The guesswork is removed, the right mix of products in the right quantities are ordered, and you end up with more of the products you do need and less of the ones you don’t.”
Everyone wants to be more profitable and implementing solutions like the ones mentioned above can have a significant impact to the bottom line.
“For example, properly managing instant lottery tickets reduces possibility of shrink,” Fox Hadley says. “Also, using an exception management system not only make your store managers and home office accounting staff more efficient, it ensures that your company policies relative to cash over/short rules and others are being met. And implementing a system capable of handling advanced merchandising strategies help to ensure that you are selling the right items, in the right way.”
[SUBHEAD] Ongoing Learning
End users should strive to learn more about these overlooked capabilities when first purchasing and incorporating a back office solution into their operations.
“The key is to get new customers engaged with the PDI user community,” Bates says. “If they are active in the community, the information and knowledge regarding these important, yet sometimes overlooked features are brought to light.”
Being well informed will enable you to keep track on the appropriate timing of upgrading your back office solutions to make the most of your existing system.
PDI typically offers two major releases per year. As Bates explains, the features added to the software are the result of feedback from more than 330 corporate customers.
“Ideally, customers should stay within two versions of the most current offering in order to take advantage of software improvements and new features,” Bates says. “As long as the technology underpinning the software offering remains current, marketers and retail operators probably don’t have to change systems very often.”
Fox Hadley recommends that you ask questions and take your time in making a decision about your back office system and any upgrades you purchase. “It’s easy to get caught in the trap of focusing too much on what you do know, as opposed to what you don’t know,” Fox Hadley says. “Go find out what you don’t know. Look at ways you can improve your efficiencies, not only by implementing new solutions but by looking at your own processes. And get your internal teams involved in the discussion. Find out what they are doing manually and look at ways to provide an automated solution to help.”
And remember, upgrading your back office solution and learning about its advanced features can take your back office process and procedures to a whole new level. “Working closely with your back office solution provider to understand what new features and functionalities are being added and that you will benefit from is a critical component in understanding when to upgrade,” Fox Hadley says. “Replacing the entire system can be a very costly and time-consuming undertaking. Before making that decision, be sure to understand what your current back office solution partner’s roadmap plans look like and how they fit into your goals.”
ADD Systems typically provides one major release of its software on an annual basis. In addition many “minor releases” are made available during the year. “We encourage all of our customers to evaluate the features and benefits on an annual basis,” Redmond says. “The marketplace is rapidly changing and we would not recommend a customer go more than the years without considering a system upgrade.”
Beckley says that most retailers keep their back offices for a really long time. “They will change out a POS solution twice before even thinking about a new back office,” Beckley says. “A retailer should upgrade or change their back office when they realize it is not providing the necessary level of timeliness or quality in the data. If a retailer is changing the POS or changing their accounting system is also a good to rethink back office options. The back office is really just an interface between the POS and the accounting/financial systems.” If either of these change you should look at the back office solution and see if it should be upgraded or replaced.
Be sure to analyze what solutions need to be replaced and determine what solutions are available to replace as you need to vs. a complete replacement.
“And remember, changes in technology can have an impact on existing systems,” Fox Hadley says. “Newer operating systems and Internet browser versions—not only from a software but also from a hardware standpoint—can play into your decision making so you want to evaluate those areas closely as well.”