Expectations vs. Reality when Implementing a New Inventory System
Thinking of a new inventory system? Here’s the truth of what to expect.
1. The Costs
“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?”
A bespoke inventory system that’s fully customisable costs hundreds of thousands of pounds.
Most SMEs 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, 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.
So, what can you do to help reduce these costs?
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
“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.”
A successful implementation project for your new inventory software could take anywhere between 2 and 6 months.
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 you won’t need to invest too much time. But when it comes to data migration and staff training, you and your teams will need to be prepared to devote at least a minimum of 4 hours’ training per user to get them to a level where they’re comfortable using the new software, and 8 hours’ training per master.
3. The process itself
“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.”
Training alone isn’t enough – and neither is just moving your data.
Before you do anything with your new inventory system, 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.
There are two important reasons for this:
1. The average implementation takes 100 hours or more
Are you 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 have worked with plenty of businesses who leapt straight into a new system and skipped all the important precautions and tests before they come to us. They found that 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 it all, and they had 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.
- 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. Get in touch with one of our experts today and tell us what you need.