a computer upgrade?

By Dean Evans The Lockwood Association. Inc. San Antonio. Tx.

^l VER three-quarters of the na!7 tion's building materials dealers have already installed some form of computerization. With so many computers in operation, industry executives are turning their attention from "should we computerize?" to "should we upgrade?"

The upgrade decision is usually "yes," if the system is four or five years old, but it may not be the right decision for every dealer. To help determine if an upgrade is right for you,let's examine some of the reasons other dealers have chosen to upgrade.

lmproved inventory management and increased personnel efficiency often justifythat first computer system. Capacity constraints and external requirements usually motivate system upgrades. However, strategic business plans, especially those to improve sales and market share, should drive the upgrade decision.

Lack of processing capacity furnishes the most obvious reason for upgrading a computer. Increasing utilization will eventually "bring a system to its knees." Capacity constraints not only limit addition of accounts, products, and peripheral devices, but can drag response time to unacceptable levels. Customers (and employees, too) balk as response times approach two seconds.

More frequent hardware failures and higher maintenance fees precipitate the replacement of many aging computers. In some cases, the savings on maintenance alone will pay for a new processor within two years. New remote diagnostic and repair features often eliminate the need for on-site service calls, providing the added bonus of even greater processor availability.

Understandably, software deficiencies are the leading reason for complete system changes. These deficiencies range from "it just doesn't work right" to "the competition's computer is better than mine."

Changes in laws and regulations cause many systems to become deficient. Older systems often can't correctly apply variable sales tax rates based on product, customer, usage, and/or location. Current tax and payroll reporting regulations (including computer tape submission requirements) have forced upgrades.

Newer systems help dealers overcome growing employee pressures by permitting implementation of popular benefits such as "cafeteria plans" and direct payroll deposit. Moreover, applicant and personnel tracking systems aid selection of the best employees and facilitate compliance with government requirements.

Competitive pressures generate the most pervasive and strategically important reasons for an upgrade. Some of the most successful dealers have changed systems just to gain a competitive advantage.

Checkout lanes usually provide your customer's last and most enduring impression so service has to be good. Quick check-out and accurate pricing are an absolute must. Product name searches (when product SKU numbers are missing) and transaction suspend/resume (when wallets or purchases are forgotten) speed check-out and keep customers coming back. An on-line price look up that returns each customer's correct product price (including promotions and "special deals") prevents loss of profits and customers.

Some businesses change systems because their point-of-sale is too complicated for less skilled employees to operate. POS devices must be simple to operate yet sophisticated enough to provide validation of credit, identification of authorized purchasers, multiple types of tender, changes in tender type, and more. They've got to be fast, too.

Customer service demands are another key factor affecting the upgrade decision. Customers like dealing with a "pro" who knows what's in stock. where it is, how to use it, and what else would be helpful. lt's tough to hire, train and retain employees with those skills, but an effective computer system can help a rookie sound like a pro.

You should be preparing to implement UPC bar code scanning. lt's coming. Full scale implementation of Electronic Data Interchange (EDl) is not far behind either.

Routinely review your computer capabilities just as you review other strategic elements of your company. It certainly doesn't make sense to consider a computer upgrade if your current system satisfies the projected capacity, capability, and competitive challenges of your business. However, investigate computing alternatives if you've identified potential shortcomings in your existing system. Talk first with your current computer vendor, then contact other vendors to learn what's available.

Even if you're just contemplating a hardware upgrade, take the time to evaluate both hardware and software options. Don't lock yourself into outdated software. Decide what's best for your company's long term strategy because computers are a long term investment that affects your ultimate success.

Story at a Glance

Questions to ask yourself if you're thinking about replacing or upgrading a computer system. ways to decide long term strategy. nuts & boltsof computer selection.