By Manufacturers, Distributors, Retailers & SYSPRO Too
On June 28, 2012, SYSPRO, a developer of award-winning enterprise resource planning (ERP) software, made two announcements, seemingly unrelated, but both driven by an undercurrent of change. The change is in the way products are bought and sold. More and more today manufacturers and distributors have at least one sales channel where they eliminate the middleman, by-passing the retailer and selling directly to the consumer. This places new demands on the business at the point of sale, demands typically not addressed by ERP. SYSPRO’s response is a fully integrated Point of Sale (POS) solution that will provide manufacturers and distributors a single solution to manage business information, store operations, customer-focused POS, inventory optimization and merchandizing along with ERP.
At the same time, SYSPRO itself is engaging in a new way of selling. In a world where you hear more and more, “There’s an app for that” SYSPRO is opening its own SYSPRO App Store: an open marketplace where eventually thousands of solutions will be available to extend and complement the value of its ERP solution. Partners benefit from a broader reach with minimal investment in infrastructure and customers benefit from the easily accessible added value.
Two Worlds Converge
When it comes to managing the sale of goods, retail and manufacturing are typically worlds apart. In retail, at the point of sale you deal with cash, check or debit/credit card; the customer walks away with goods in hand and inventory is depleted. In manufacturing you process your customer’s purchase order, create a sales order and subsequently ship and invoice, relieving inventory and creating accounts receivable. Later you receive cash and apply the cash receipt against accounts receivable either on an open item or a cash balance basis.
Receiving cash in a traditional point of sale (POS) system in a retail environment is easy. Managing an open account is more difficult. For a manufacturer or distributor using an Enterprise Resource Planning (ERP) system, managing accounts and accounts receivable is standard practice. Processing a cash sale is more difficult.
In a retail environment, the cash in the drawer is reconciled against the sales recorded at the end of the day. In a manufacturing or distribution environment shipments, invoices and cash receipts are reconciled at the end of the month. Yet in all cases, everything must be posted to the general ledger in order to create a balance sheet and profit and loss statement.
So what happens when a manufacturer or distributor sells directly to a consumer? It happens more and more today in showrooms and factory outlets, as well as online. In eliminating the traditional retailer, does the manufacturer need to invest in both a retail POS solution, as well as a back office ERP solution and interface or integrate the two in the hope they will one day all work seamlessly? Not if you are a SYSPRO customer.
SYSPRO is not the first ERP solution provider serving manufacturers to offer a retail POS solution. Yet typically these are two separate products. Most often when POS is part of an ERP solution provider’s product portfolio, that solution provider is targeting retail with its POS solution and manufacturing with its ERP solution. SYSPRO isn’t going after the traditional retail sector. It is still focused primarily on manufacturers and distributors, but offering additional features and functions to support these companies as they reach out directly to consumers.
SYSPRO Point of Sale for Manufacturers & Distributors
As a result, the SYSPRO Point of Sale solution offers features specifically designed for manufacturers that might not be available in a POS solution designed first and foremost for retailers. These features include support of a “make to order” environment, complete with complex product and pricing configurations and supply chain transfer, a feature that supports tracking of shipping and in-transit inventory. It also includes support of lot tracking and serialized products and inventory locations down to the bin level. And yet these manufacturing-specific features are blended with features necessary to fully support a retail environment. Features like:
- category and catalogue browsing
- customer and loyalty programs
- store management
- exchanges and returns
- touch screen interface and mobile access from a tablet
- scanner and cash drawer functions that allow the use of any personal computer with a “locked” cash drawer
- credit card limits for individuals in addition to an overall account limit
- end-of-day cash reconciliation (“cash up”)
To make the solution more scalable, SYSPRO has uncoupled the ERP and POS user counts. A manufacturer might have 10 named users for ERP and 1,000 POS users. Or a SYSPRO Point of Sale user might also be linked to an existing SYSPRO ERP user. While accessible through a web-based interface, the system has been designed to be “always on.” This means the store can continue to operate even if the connection back to the central server is lost, a necessity because you can’t afford to have a customer walk out the door for lack of service. When the connection recovers, data is synchronized transparently and seamlessly.
The goal is to provide manufacturers with retail operations a single solution to manage business information, store operations, customer-focused POS, inventory optimization and merchandizing along with ERP. It has several customers currently running both SYSPRO Point of Sale and ERP including:
- Coricraft Furniture, a fully integrated furniture retailer in South Africa. Its manufacturing facility produces a diverse range of high quality, full grain leather and fabric couches in a variety of styles and colors. Coricraft has 80 SYSPRO ERP users ad 370 Point of Sale users
- Lesel Research, a beauty product manufacturer and retailer with 48 SYSPRO ERP users and 40 Point of Sale users
SYSPRO is Preparing for Change Too
But manufacturers aren’t the only companies experiencing a change in the way product is bought and sold. Consumers today are quite accustomed to hearing, “There’s an app for that.” In response they go online to purchase and download those apps, and they start using them immediately. Many of those consumers also work for manufacturers and distributors. So why not bring the same convenience and buying experience to the corporate world?
The SYSPRO App Store is SYSPRO’s response to its customers’ growing appetite for expanded functionality and the consumerization of Information Technology (IT). It is an online marketplace for the global SYSPRO community where partners can offer new products and customers can search for solutions. In fact it is a public site, so anyone will be able to browse and search, but a secure login will be required to either purchase or publish.
So the SYSPRO App Store is a way for partners to add value to the SYSPRO solution. Any registered partner can publish to the site, making applications or content available using one of three licensing models:
- free and unlimited usage
- perpetual license with one-time payment
- protected license with an initial payment, followed by a recurring annual fee
Publishers can make a free trial version available in addition to a full commercial version. This feature and the App Store in general will be a very cost-effective way for the partners to market their products globally, potentially reaching a far broader audience than their own immediate sphere of influence. And they can use SYPRO’s licensing technology to protect their intellectual property (IP) while also generating recurring revenue.
SYSPRO Takes Control
SYSPRO will evaluate and must approve all products, but as the volume is likely to grow over time (SYSPRO ultimately expects to host thousands of apps), this may wind up being rather cursory. But there are two additional factors that will make the site somewhat self-selecting. First of all, the publisher of the app will be required to provide support and issues are logged right in the “store.” So SYSPRO would be able to monitor all. An unusual number of open tickets will help identify apps that might not be up to snuff or partners that are unable to provide adequate support. The risk of course is in giving SYSPRO a black eye before the problem is identified and corrected.
So perhaps even more appropriate is the consumer-like five star rating available for each app, along with customer reviews and comments. Poorly performing applications will not be able to hide, and will likely not produce many sales. In a reference-based business like software applications, the insight these ratings and reviews will provide can be priceless.
Managing the Process
SYSPRO will manage the eCommerce aspect, collecting payment from the customers and distributing payment to the partner on a quarterly basis, after taking its cut of course. This leaves the partners free to concentrate on the products themselves, leaving distribution, payment and sales tracking to SYSPRO.
The buying process is simple and straightforward but it is also a controlled environment, which will prevent purchases from individuals at SYSPRO customer organizations that are not authorized to buy. And an administrator at a customer site can monitor what products have been downloaded. The App Store handles version changes and will inform consumers of the product when an update is available, one less thing for the publisher to worry about.
A full ERP solution still requires the due diligence of a comprehensive evaluation, careful planning and commitment from top management, right on down through the rank and file. But once an ERP solution is in place, companies continue to change and grow and many seek continuous improvement. Having the ability to easily expand ERP’s footprint to satisfy changing or expanding needs is a huge plus.
We live in a world of change. The way we buy and consume products is changing as fast as the technology that has infiltrated our lives. We demand instant and direct access to products and we expect the companies selling us these products to evolve and adapt to our demands.
SYSPRO Point of Sales, together with its ERP solution blends the manufacturing and distribution of goods with retail, providing a direct selling process in a single integrated solution. The SYSPRO App Store provides a direct purchasing process for SYSPRO customers, while maintaining control over that process. And it has the potential to aggressively expand the footprint of the solution.
It would appear SYSPRO has both ends of the spectrum covered.