It’s not advisable for distribution companies to sit out the software revolution that’s changing the way their industry does business. Innovations in cloud-based Enterprise Resource Planning (ERP) software for distribution are enabling distributors to cut costs and speed up operations. It’s time to make a move, but what should you look for in a distribution ERP solution? As an Acumatica partner, we recommend checking out the Business Management System Evaluation Checklist, which will summarize here.
ERP for Distribution
ERP for distribution management helps you manage your supply chain and logistics. This may include warehouse and inventory management along with functions to oversee sales and purchase orders. What makes these new solutions different from earlier generations of warehouse software is its ability to integrate with your broader business applications. Acumatica Distribution Edition, for example, connects seamlessly with accounting and finance, Customer Relationship Management (CRM), manufacturing management, field service management and project accounting.
The Distribution ERP Checklist
The Acumatica distribution ERP checklist recommends looking at a potential distribution solution from five perspectives:
- Productivity—How the product can make you and your staff more productive
- Functionality—What the solution’s features and functions actually do
- Technology—How the product’s technology affects usability, customizability and maintainability
- Value—The solution’s financial impact over the long term
- Risk—The solution’s contribution to security posture overall
The productivity section of the checklist suggests that you look into issues like usability, e.g. is the software easy to use and available on all relevant devices? Multi-language and multi-currency capabilities also affect user productivity, as do workflow automation tools. Acumatica includes document management and reporting features as productivity factors as well.
The functionality of a distribution ERP solution is where it can have a real impact on the way your business runs. For example, the checklist suggests that you look at how well a potential distribution ERP handles multiple business entities. This is relevant for companies that operate in more than one country or have their warehouse operations in a different corporate entity. A good distribution ERP should handle financial consolidation and intercompany transactions. Critical workflows like “Quote to Cash” and inventory control should also be part of the distribution ERP evaluation process.
The important thing to grasp when assessing distribution ERP technologies is that not all cloud ERPs are alike. Some, like Acumatica are native to the cloud. Others may be legacy (on-premises) solutions that have been adapted for the cloud. A true cloud ERP for distribution will always be accessible through a web browser alone—with no specialized software to download and install. Other technological points to examine include whether the solution has a full relational database and standards-based (e.g. RESTful) APIs for application integration.
Value will invariably be part of an assessment of potential distribution ERPs. Acumatica recommends taking a thorough look at the solution’s true Total Cost of Ownership (TCO). This figure can be tricky to determine accurately. The “sticker price” is not TCO. Rather, TCO should consider factors like support personnel, costs of integration with other systems and so forth. The value calculus could also be affected by future growth, as scaling some systems generates unexpected costs.
All conscientious IT managers are aware of cybersecurity risks as a factor in selecting a new solution. Distribution ERP is no exception. The Acumatica checklist suggests paying close attention to how and where the platform stores your customer data as well as its ability to support your existing controls and security policies. The solution’s backup and disaster recovery capabilities should also be evaluated in the process of selecting a solution.
We have worked with many distribution businesses on the selection and implementation of cloud-based distribution ERP solutions. We are available to help you with this process. If you would like to see how Acumatica Distribution Edition might work for your business, contact us for a demo and consultation.