Business Advantages with Custom Software Podcast – Episode 001
Carlee – Hi everybody, this is Carlee and you’re listening to the Business Advantages with Custom Software Podcast, the show that helps businesses achieve more with software.
Today we’re answering the question: Should I build an inventory management system?
I’m here with the president of Tornado Technologies, Mark Roshon, and the general manager, Tom Loya.
Mark, why might someone want to build an inventory management system rather than buy one?
Why Build Instead of Buy?
Mark – Well, thanks Carlee.
Yes, there are a lot of very nice inventory systems out on the market at different price points, different levels of functionality and there’s certainly nothing wrong if something fits what you’re trying to do.
But there are a few reasons why somebody would want to build their own system, a custom-built system, whether it’s for a competitive advantage or just saving money.
And I’ll explore a couple of those.
The first one is just the most obvious, which is there’s nothing that fits your workflow.
You have a specific workflow that you’ve honed over the years and you know that’s the best way for you to operate.
And you cannot find an inventory system that matches that.
You want a tool that’s going to help you do things more efficiently the way you want to do them and you don’t want to have to change the way you do work simply so you can use the software.
If that’s the case, that’s kind of a no-brainer that you’re going to have to build something to match the way you do things.
Can Custom Software Save Money?
Mark – But the second one here is not quite as obvious and that would be to save money.
And I know some of you might be scratching your head saying isn’t custom software more expensive?
Not necessarily.
A big driver for software or the cost of software development is really the number of features and the level of complexity.
These inventory packages and inventory management systems are written to accommodate thousands of companies.
This can really drive up the complexity and, therefore, the development cost.
If you’re simply developing software just for one company and perhaps only a few feature sets, it actually could be quite cost effective.
A Warehouse Example
Mark – Let me give you an example.
I know a company that had a very large warehouse and they just stored all kinds of things that they may store and then not pull back out for a year later, or even a couple of years later.
They really just wanted to track where items were stored.
So they wanted a very quick and simple way that when they stored something in the warehouse they could record where it was, have it in the database, and forget about it.
Then maybe a year later somebody needs it and they want to find it very quickly and see where it was stored.
They didn’t need on-hand quantity, reconciliation, management tools, or all the additional functionality many packages have.
They just needed tracking and finding ability.
Something like that has a very narrow set of features.
It’s just for one company.
That’s something that can be developed quite cost effectively.
You could save a lot of money and it could be a one-time fee instead of ongoing monthly fees that many software packages charge.
Customizing Existing Inventory Software
Mark – Another way of customization, or why you might want to build something, is you’re simply customizing an existing package.
It’s not really an either-or buying decision.
You can actually take a purchased package that you like many features of, but customize just one portion of it rather than rebuilding the entire system.
Tom, can you give us an example of how someone might want to customize just a portion of a purchased package?
Improving Inventory Forecasting
Tom – Sure.
Sometimes a purchased package will provide the ability to forecast inventory.
But often this forecasting doesn’t do a good enough job and it only ties in the information it knows about.
A great example is tying it into an ordering system where we can look at a certain inventory item and determine how much of that inventory is scheduled to be produced or used with upcoming orders.
Then, with the forecasting, we can use that number to come up with a better forecast instead of relying solely on historical information.
We’re actually doing it based on future usage and we have a better forecast number.
Mobile Inventory Applications
Mark – Oh yeah, it’s a great example.
What about mobile?
I know a lot of people are concerned about whether or not they could use a mobile device.
Tom – Well, everybody has a mobile device these days, so it only makes sense to leverage the power and convenience of these devices.
We can write a simple app that runs on somebody’s phone and use that instead of purchasing the specialized hardware that inventory systems often require.
This eliminates hardware costs by utilizing existing mobile devices.
With those mobile devices, we also gain the ability to push notifications to a plant floor manager.
For example, if a specific inventory item is running dangerously low, the manager can be notified immediately.
Many inventory systems don’t have that capability built in, but a mobile application can provide it.
Should Integration Influence Your Decision?
Mark – Thanks Tom.
I also want to say that integration is something to consider—or actually not consider, is really what I mean to say.
All businesses have multiple systems.
Not only inventory, but accounting systems, CRM systems, operational systems, websites, and more.
Many times these systems need to communicate with each other.
I often see people make purchasing decisions simply because one system already has a connector to another system.
For example, someone says they chose an inventory system because it already had a connector to their accounting software.
That’s great if it already exists.
But I would not make my purchasing decision based on that connector.
First and foremost, you want the best inventory system for your business.
What you need to understand is that integration can be done in just about any system, especially today.
Modern APIs Make Integration Easier
Mark – Most modern systems have APIs, or Application Programming Interfaces.
These allow one computer system or software application to communicate with another.
That means integration can often be added after the fact.
If you need your inventory system to communicate with your accounting software, the data can usually be transferred between systems without much difficulty.
Whether a connector already exists is nice, but it should not be the primary factor driving your software decision.
Final Thoughts
Mark – So I think those are a number of things to consider when deciding whether a custom-built inventory management system would be right for your business or give you a competitive advantage.
Now back to you, Carlee.
Carlee – Thanks for listening to Business Advantages with Custom Software Podcast with your hosts, Mark Roshon and Tom Loya.
We hope you enjoyed our insights into building an inventory management system.
If you’re interested in learning more about custom software, join us next week when we’ll be talking about why custom software gives you a competitive edge.
As always, you can head over to our website TornadoSoft.com to learn more, as well as check out all the links and resources in the show notes.
That’s all for this episode, folks. See you next time.
Trying to decide whether to buy, customize, or build an inventory management system?
Tornado Technologies helps businesses evaluate their options and develop custom software solutions that fit their unique workflows, operational requirements, and long-term goals. Schedule a call to start!