Equipment-Centric Lawson Software Knows Your Bottom Line
By Joanne Costin
Article Date: 09-01-2009
Copyright(C) 2009 Associated Equipment Distributors. All Rights Reserved.
Value assessment demonstrates significant savings for dealers, including Wheeler Machinery.
Not so long ago, a dealer might purchase a new software program with the hope that it would generate a positive return on investment, and that would be enough. But that was then and this is now. Dealers today want to know how a software system purchase will pay off. One software vendor is providing that information by examining the opportunity cost of not moving forward, quantifying future savings and return on investment.
Justifying the Cost
Lawson Software has developed an innovative tool to help dealers quantify their investment in Lawson’s Equipment Service Management and Rental, a software product launched in November of 2008. “People need to justify the cost,” said Julian Archer, global marketing manager for Lawson Software. “With Lawson you can sit down with our consultants, before you sign a deal, and undertake a value assessment. The value assessment answers the question, how much will I be spending if I don’t do this?”
During the value assessment process, Lawson consultants will talk with the senior staff of a dealership and evaluate how they are doing things. “We would look at whatever key performance indicators they have,” said Archer. “Then we can see how much they can save by implementing our solution.”
As part of the evaluation process, Wheeler Machinery, based in Salt Lake City, undertook a six-week value assessment. Through the assessment, the company gained an in-depth understanding of the potential financial benefits to be gained by the investment. After interviewing dozens of employees, Lawson provided a detailed review and analysis of the specific key performance indicators, business processes and best practices to help drive improvements at Wheeler.
“Frankly, the numbers [savings] were really big, when they first presented them to us,” said Jeff Ipsen, CFO. So then the dealership asked the question, “What if we only got 10 percent – would we move forward, even at 10 percent? The answer was “yes,” and so the company is now in the early stages of deployment, and expects a payback within three to five years.
According to Ipsen, one of the positives of the value assessment is that it identifies 25 to 30 areas of opportunity. This was not the case with other software conversions Ipsen was involved with. “In this case, we have a road map that we can work towards and work from,” said Ipsen.
The software will support integration with Caterpillar, enhance customer service, gain organization-wide visibility into business processes and create a reliable, consolidated source of information. Wheeler will also use the Lawson Human Resource Management Suite to help optimize its workforce.
The implementation of the single, integrated Lawson system will replace Wheeler’s current reliance on several different software systems. “The thing I like the most is that it is fully integrated,” said Ipsen. “Information flows seamlessly and easily through all of the different products: payroll, finance, accounting, operations.”
Benefits of an Enterprise System
According to Archer, there are five main areas where customers typically find value in the system: (1.) streamlining service/support operations; (2.) higher technician productivity and increased throughput capacity; (3.) increased sales through additional face time and improved close rates; (4.) increased parts and service sales; and (5.) reduced services (work in progress) and day’s sales outstanding.
Lawson’s Equipment Service Management & Rental helps dealers manage equipment from initial sale through its useful life until disposal. It supports integration across a dealer’s global supply chains and links back to the equipment manufacturers. It also helps improve integration across the dealer’s internal sales, finance, service, warranty and rental departments. This integration helps dealers more quickly process customer orders and warranty claims.
The software also helps dealers plan and schedule future service requirements based on the maintenance programs of their customers’ equipment currently in the field to help better predict future parts and labor demands. “If you are entering into an agreement that stretches out into the future,” explained Archer, “you need some level of confidence that you can handle and manage the risk and at the same time make a profit.”
“Many dealers have a hodgepodge of systems,” said Archer. “They have a financial system, a little maintenance system over here and little rental support system over there. Or, they have a system that is ‘in theory’ covering their needs, but not covering it to such an extent that they can be flexible in their approach to the market.”
According to Archer, what dealers are missing is deep functionality. “They need some consistency of approach, some transparency of operation. They need to actually trust the data on which they are making their decisions.”
For the most part, dealers are no longer sales companies. Servicing is more important than selling, and so the service and maintenance elements of their business need to be an integral part of their own business processes. “The real value of software is through optimization of their entire processes,” said Archer.
Focused on Equipment Dealerships
For the past few years, Lawson Software has focused on the construction equipment dealer segment by making it a dedicated business unit. By choosing just a few market segments in which they wanted to compete, the company has gained considerable success. Finning, the world’s largest Caterpillar dealer, began using the software in 2008. More than 300 other equipment-intensive customers throughout the world have successfully implemented Lawson’s software solution.
While Archer is pleased about success with Cat dealers, he is also emphatic that the product is not strictly for Cat dealers or even large dealers. The software is preconfigured so that smaller dealerships can implement the solution out of the box, while larger dealers can customize the solution if that’s what they want.
An important feature of the Lawson software, says Archer, is the equipment profitability portal. The software now allows dealers to look at the profitability of the machine from the initial sale through to final disposal. From this data you can plan preventive maintenance schedules and forewarn a customer when profitability will end. Decisions on when to service, buy or sell are based on hard data, rather than intuition.
“We try and do that now,” said Ipsen, “but it’s difficult.” He believes the new system will make this process easier.
Rental functionality was another feature that was an upgrade in the latest version, and something that Archer believes is unique in the industry because it’s not just a separate rental program, but part of the total enterprise solution.
A Veteran Player
While Lawson might be a relatively new face in the U.S., the company has been around for more than 30 years and is a major global business software provider serving more than 4,500 customers worldwide. The company’s Web site features more than 200 case studies organized by industry.
Of course, the success of any software program in large part depends on getting the entire staff on board. Lawson has trained consultants in all aspects of the business process to ensure successful implementation. Training usually begins with a learning camp to introduce key users to the software and processes.
Technology won’t fix all of the problems dealers face today, but it’s refreshing to know that there’s at least one software vendor prepared to show you the benefits to your bottom line, not just the bottom line price.
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