Articles

Most large organisations using an ERP system tend to roll with whatever Point of Sale module is on offer in that system. After all, they’ve made a substantial investment, so on the surface it makes sense to leverage as much of that investment as possible.

But is an ERP system really the best option for transacting with customers in person?

Why your ERP system probably isn’t the best option for taking payments

When discussing ‘best-of-breed’, Gartner states:

Although enterprise resource planning (ERP) vendors offer numerous enterprise applications and claim that their integrated system is a superior solution, all modules in an ERP system are rarely best-of-breed.

Nowhere is this more apparent than with Point of Sale functionality.

Of course, there are countless benefits of an ERP system – largely related to integrated business functions and the associated process improvements, having all data housed in a single location, to the resulting business intelligence and forecasting insights.

But with this power comes complexity. ERP systems are notoriously time-consuming, costly and difficult to learn for end users.

Contrast this with front-line imperatives, where employees deal directly with customers – it’s speed, simplicity and accuracy that are critical.

Insights from our Government clients

This need for speed and simplicity was clearly evident when we implemented our Point of Sale solution for Queensland Boat Harbours, part of the State Transport Department.

They wanted to streamline their process for taking card payments for fees and charges in the field. The process for collecting these fees involved receipting directly into their ERP system, which was time-consuming and involved multiple screens just to accept a customer payment.

Staff members needed costly training in the ERP system to process transactions which was the only activity they used the ERP system for. If a trained staff member wasn’t on duty, payments were sent offsite to a customer service centre for processing – adding more time, complexity and increasing the risk of lost payments.

Our Point of Sale system was installed on their Commonwealth Bank Albert devices and integrates in real time with their ERP system.

When shown how to use the new Point of Sale system, the response from employees was along the lines of ‘Is that all I have to do?’. The new system has freed them up to focus on their ‘real’ job of maintaining a safe harbour. And because they’re no longer burdened with excess paperwork – satisfaction has improved significantly.

Customers have noticed a difference too – no standing at the counter waiting for a receipt or having to wait for it to arrive in the mail.

The Project Manager of the initiative says:

 “The project has turned the cumbersome receipting of payments into something that just works. We’re now processing transactions in just 30 seconds.”

So, integrating best-of-breed Point of Sale functionality with ERP means the ERP system benefits from real-time, error free transaction data and the Point of Sale system benefits from the customer data housed in the ERP system. Business intelligence also improves because of high quality, real-time data and both customers and employees are much happier – proving that ERP and Point of sale really are better together.

Find out more about ERP and POS in our Boat Harbour case study.

Mobile payment is so well established now that we give it little thought – we expect to be able to pay anywhere.

Point of Sale has traditionally been the checkout point in retail stores – built for security and control, but not necessarily with the flexibility to embrace new forms of payment such as mobile.

But whilst POS systems and mobile payment pin pads are both well established technologies, what has been far more elusive until now is the ability to bring them together – that is, to offer mobile payment with full transaction capability. .

We see a major shift occurring with Point of Service and payment converging. It is a shift driven by consumers’ demand for convenience and for being able to transact the way they prefer – and, as we know, the consumer is gaining increasing power and control over this choice.

This shift is good for the customer, and good for retailers, who realise that simply capturing payment is not enough. A ‘stand-alone’ payment transaction – that is, one that is not linked to transaction data – not only means that you have to manage reconciliation, but that you also miss out on capturing the full details of the transaction. These details – the customer, the product, accurate pricing, loyalty – are the very essence of customer insight!

So what does this convergence mean in practice?

What it means is that instead of just making a payment at the pop-up store, the retail customer can swipe her loyalty card and have the points instantly added to her balance, she can use a gift card and the retailer can update inventory and financial systems in real time, saving the cost of end of day reconciliation.

It means that the field service engineer can instantly update the inventory system to show the parts he has used, and send digital receipts for payments.

It means that local government can offer self-service payment kiosks that update back end financial systems in real time.

It means that healthcare providers can update patient medical records at the same time as taking payment.

Payments and POS have co-existed for many years, but their convergence creates a complete transaction record and new source of valuable business data. Payment and POS convergence enables reduced time and cost of reconciliation to back end systems, and drives customer satisfaction and loyalty.

It is time to embrace the shift to consumer choice and re-align to capturing and utilising the data that matters.

Reconciliation is a costly business. I’m not talking Reconciliation in the political sense here, I’m talking Reconciliation in the business transactional sense. I mean tying together the key pieces of data that make up a financial transaction – customer information, product and inventory information and financial information.

This is a process faced by anyone who takes payment for products and services from a customer – from retailers, to local government, to field service companies, to transport companies, to healthcare providers.

The issue is that at the time that the transaction takes place, not all the information is connected, so it has to be pulled together, or reconciled, after the event.

For example, a pop-up store takes payment on a mobile terminal and swipes the customer’s loyalty card, but at the time of transaction has no access to customer information or to inventory. At the end of the day, the transaction has to be reconciled to the loyalty system to give the customer his points, and to the inventory system to update stock levels.

A roadside assistance engineer uses the parts from his van stock to service a customer call, but has no immediate access to the inventory system. At the end of each day he has to send stock-level information through to head office for reconciliation.

A budget airline offers customers the option to upgrade their luggage allowance at the airport – they take payment on a mobile device, but have to manually reconcile the customer and luggage systems to build a new manifest.

A local government wants to offer self-service bill payment to citizens, but unless the self-service device is connected back to the financial and customer databases, reconciliation has to be performed at the end of the day.

A healthcare nurse on the road delivers care and medications to patients. In some cases, payment is taken on the spot, but from a standalone terminal, with no link back to patient records, so reconciliation has to be done manually at the end of the day. In other cases, an invoice is generated and sent after the visit.

So what is the cost of reconciliation?

• One local government estimates the cost of physically serving a bill payment customer is $39.
• A healthcare provider estimates the cost of sending an invoice at $50.
• A retailer knows that for every 3 inches of printed receipts he can replace with digital ones, he saves $160,000 per year.

Then there is the lost opportunity cost – the engineer sent to a call out without the right parts because inventory wasn’t updated. The disgruntled customer who couldn’t use his points because the system wasn’t updated the same day. The airline customer who couldn’t find a staff member because they were tied up with updating baggage systems.

All of these are very real costs and challenges. And all can be addressed and eliminated by using a Connected Transaction approach – harnessing the power of the Cloud to tie together all this key information in real time. If reconciliation happens in real time, as the transaction is made, service providers have a massive opportunity to drive down costs, increase efficiency and maximise business opportunity.

There is no better way to determine the benefits of a new system than running a proof of concept – a small scale implementation within a subset of your business can be used to extrapolate the impact of a full scale rollout. As a retail software developer for 20 years, I’ve seen an enormous number of POCs, as you can imagine. I – and my customers – have learned a great deal from these, and in this article I’d like to share with you some of the insights we’ve gained.

Let’s start with what not to do – the biggest mistakes that I see are:

• Fixed ideas – rather than starting with an open mind, some organisations take the rather limited approach that a POC is to ‘prove’ that their hypothetical solution works. The issue with this approach is that it doesn’t allow for the possibility that the concept may not be proved and that the first concept may not be the best.
• Too big – trying to cram too much into a single POC, which requires a big investment of time and money. This then has the knock-on effect of the ‘sunk cost dilemma’; the investment is deemed too big to be ‘wasted’, so lessons aren’t taken on board and flexibility is sacrificed.
• Paralysis – being convinced that a POC is such a massive undertaking that it never gets started.

“A POC is a chance to reject ideas”

I see a POC as a chance to try, and possibly reject, alternative approaches. This is only possible though with a rapid, agile and low cost POC. I call this approach ‘fail fast’ – I believe that a good POC is one that shows you what doesn’t work as well as what does – but quickly.

Aim to ‘fail fast’; find out what doesn’t work – quickly

Mobile POS is probably the biggest focus area for my clients, and our success with POCs has seen them up and running in 6 weeks, with full implementations in 6 months. And I’m not talking about small retailers with a handful of outlets – these are some of Australia’s top retailers with an extensive nationwide network of stores.

“Full mobile POS implementation in 6 months is possible – we’ve got customers who’ve done it”

Based on ours and our clients’ joint experience, here are my top 10 tips to a fast and successful Mobile POS proof of concept.

1. Don’t over-complicate – just get started. Mobile POS does not have to replace all POS functionality – so don’t try to do everything at once. Start with mobile POS and have ongoing enhancement in mind, it will be a continual improvement process.
2. Find a sponsor. Mobile POS is a business enhancement, not solely a technical project, so consider your digital team leader, marketing and store operations, even the CFO or CEO
3. Keep a customer focus at the forefront of your project. It really is about deeper customer engagement and more timely and relevant service. Build customer response into your evaluation criteria for the POC.
4. Embrace the opportunity to address associate empowerment and lift productivity. As well as customer benefits, consider opportunities to make the most of in-store team and their skills – it builds focus, energy, ideas and enthusiasm.
5. Harness the knowledge of your in-store team – encourage them to determine where mobile POS can best be used. They have the greatest in-depth knowledge of store operations and customer requirements, so don’t make all the decisions at head office. The more you can engage them in the POC, the more they will support the final solution. Have discussions on how mobile can help boost productivity – with customers, stakeholders and staff.
6. Select the POC store(s) based on customer requirements and staff skills and attitude. You want to ensure that the POC results can be extrapolated out to the wider business, and also that you select staff who will see the positives of making the POC a success.
7. Ensure you build a solution you can rely on: Maintain discipline with POS integrity – accurate pricing, integrated data and settlement and other retail business rules are essential for a robust system.
8. Use familiar tools wherever possible – consider using the mobile devices that staff are familiar with, so that they can focus on how to provide better services and store processes
9. Understand the fact that your teams will learn fast from live experience. Stores are the core of the POC, so support stores to trial and learn. Get live in store experience, with a working solution, and create a new way to focus on the customer.
10. Above all – don’t be afraid to fail, but fail fast. Too many POCs start with rigid ideas, which are not changed, even in the face of evidence that they are not working. The great thing about a rapidly implemented, contained (and therefore lower cost) POC is that it gives you the opportunity to rapidly try different approaches and reject those that don’t deliver benefit. We need to think of the POC as an iterative process; a process where rejecting trialled approaches that don’t work is as important as keeping those that do.
    The ultimate proof point of this approach is our customers’ success – here’s what a couple of them have to say:

“We have taken the approach that it’s better to fail fast and learn a lot from it and Surefire was a good fit in this regard. They were willing to work with us in a fairly agile state and there was minimal upfront investment.”

“What was great about the Surefire solution is that there was no big capital outlay to get started. The financial model supported the rapid implementation approach”

I’m passionate about changing the way that POCs are conducted – I know from experience that they don’t have to be massive lumbering projects, which can’t change direction once started. They can be fast, agile and fantastic learning experiences that pave the way for successful implementations.

It’s a week before Christmas, your store is packed, and goods are moving off the shelves as fast as you can replace them. But….queues are growing, customers are getting disgruntled and some are just giving up and leaving without buying. This is every retailer’s worst nightmare – not being able to serve customers who are in already your store, wanting to buy.

What if you could solve this problem, and solve it in time for this Christmas – no more queues, no more walk-outs, just increased sales and delighted customers.

Mobile POS can help address the Christmas nightmare, and deliver customer engagement, increased sales and better productivity all year round. Most retailers are aware of the benefits of Mobile POS, and research from Retail Info Systems shows that 84% of retailers have plans to implement it at some point. But many are put off starting by the perceived cost and time needed to get up and running.

With the right approach however, it’s possible to trial in weeks and implement across your entire store network in months – which means that if you start now and if you implement a solution that gets you up and running fast, you can be queue busting by December.

In my experience, there are a few key elements to swift implementation of Mobile POS:

• Don’t over-complicate – just get started. Mobile POS doesn’t need to be complex. Think of it as a starting point, and have ongoing enhancements in mind.
• Add to what you have, complement it – don’t replace it. Mobile POS can sit alongside your existing POS.
• Utilise the Cloud to connect your existing systems to Mobile POS – ensure you maintain integrity of pricing and discount data.
• Don’t forget that integrated payment is an essential element of Mobile POS if it is to deliver real value – you have to be able to offer checkout as well as information.
• Use familiar technology so that your staff learn quickly and engage – their feedback is invaluable at the trial stage to understand where Mobile POS is going to deliver most value.

With this approach, a Mobile POS implementation across all your stores by Christmas is a reality, and your nightmare scenario could become a dream Christmas.