Building versus Buying: Part 2

Part 2 of 'Buying versus Buying Systems'

· logistics and systems

Last time I ranted and raved about all the reasons Not to build your own system, so this time I'd like to explain some key things that you should know when you go to buy a system. First off, purchasing a system will take time. Going through the purchasing process isn't the fastest thing in the world, and the bigger the purchase, the more time it'll take. Secondly, it will also cost you money to go through this process - paying for lunches, staff not doing their everyday work, getting NDA's sorted - as well as the cost of the system itself. 


Here are some red flags to look out for when buying systems:

  • Salespeople that say 'yes to everything you ask for.
  • PowerPoint presentations are too polished, meaning they probably spend more money on marketing than the mechanics of their product.
  • Crap PowerPoints, this means they don't spend enough on the presentation of their product. Meaning the UI - which your team have to use - will be less appealing and intuitive and thus less likely to be adopted by your front line operators.
  • Inadequate financing, if the supplying company has "no debt", then the only way they finance new product features of their system is by overcharging you for services and upgrades. Upgrades they'll then on-sell to others for profit.

 I always found this particularly frustrating.

  • Suppliers without a roadmap. The world changes fast, you don't need to know precisely where it's going, but a system supplier needs to have a direction of where to take things. At a minimum, they should know where the industry is going and their plan to be there as well.
  • Your roadmap and their roadmap don't align. Like getting into a relationship (which I totally know a lot about... not), if you don't agree on expectations (or where you see things going) at the start, you're going to have deep conflicts in the future. 

The assumption here is that you know where you want to take your business in two years.

  • They have no reference sites that you can go and visit.
  • Poor quality reference sites. When you see other people using the system you're thinking of buying, and they hate their lives and contemplate alcoholism when using it, take this evidence into your purchasing consideration.
  • They have a rubbish website - go back to the point about bad PowerPoint presentations.
  • They don't bring a developer or someone technical to the meeting - someone to answer non-sales questions.
  • They can't show you the working product in a demonstration.
  • The product is difficult to set up and configure (remember what I said about complication equaling more money out the door).
  • Your team hates it. Try to find out why.
  • When the solution provider says something like, "we can make the system do anything you want", this is usually a sign that it's been designed for huge businesses that are content paying ridiculous ongoing fees. Meaning that you probably need to call someone and spend money any time you want to add a new product or change something.


Ask a Greg

Fancy salespeople and great looking websites are easy to get excited about. Throw in some buzz words like 'AI' and 'blockchain', and the glitter can get pretty blinding. So if you ever need an objective and harshly realistic opinion of the thing you're thinking of buying, ask Greg. 


In every business, you'll find one. Greg usually has an in-depth understanding of how everything works, knows enough about "IT" (to pass as a support worker) and loves to give out his opinion in the harshest possible way. Greg, in other words, is a doosh, the annoying person that will find a way to complain in any situation, like, he could be in the Mediterranean on a warm summers day sitting on a yacht sipping Champaign, and Greg will complain about the colour of the decking. 


As much as I wouldn't recommend going on holiday with Greg. When wanting an unbiased opinion, I would ask - briefly, since Greg's usually like to talk a lot because nobody's ever asked them a question before because they are so annoying - I would ask him for his opinion on a system. Because annoying or not, Greg doesn't really give a shit about being nice or about anyone else's opinion. I mean, if he was friendly and did, then he'd be less annoying... But then he wouldn't be Greg, would he? 


Anyway, the point is, ask a Greg for honest feedback, and you should get something useful. The more open you can be with the facts, the faster you'll get to a working solution. 


Their system doesn't suit what we want or "how we operate".

Sure, your operations are unique but not so unique that you can't compromise and work with someone else's process. A process that the system supplier will support and give you someone to yell at when it goes wrong.


Remember what I said about there being "no standard way for operating a supply chain because each one is different".

One of the advantages a system supplier has is that they see how many companies operate and what processes they follow - or request their system to provide. The effect of this, over time, is that the system provider can actually develop the industries standard way to complete a transaction because a lot of the people in a given space all use the same system and, therefore, the same process. 


This isn't a phenomenon that I'd call 'common', but these details are worth considering when looking at your future strategic planning.


A good system will scale with you.

When your business grows, the way you handle information needs to scale with you. When you build your own system, scaling becomes more complex because you have to spend a lot more to power up your services while making sure the processes still work.


If you buy something, it's the supplier's job to make sure their system can grow and is flexible to your needs. 


Finding good people to work with will make you less depressed.

I can tell you from experience that buying an expensive TMS (Transport Management System) wasn't great. Buying it without understanding the steps - went badly. Buying a TMS without having the right team of people to support it – was a disaster that caused a nervous breakdown. 


The critical point is if you don't get along with the people providing the solution or feel they won't provide the proper support. Or the people presenting have literally no idea what they're on about... how likely do you think this will change in a very short space of time when things inevitably go wrong?


Things to look out for when buying systems [good]:

  • You get along with their people.
  • They are presented competently. Bonus points if they are slightly nervous when showing you their product - this shows they care about the deal.
  • When you ask an even slightly technical question, they bore you to death with the answer. This means they understand their product.
  • They respond to emails, calls, texts in a quick and timely way.
  • You straight-up see the value of using the system.
  • You can see your team being happy to use it - because they told you, "hey, that system looked like a really good solution to our problem".
  • You can see that although the system is not a perfect fit for what you are doing right now, both the system's configuration and your own operations can be manageably changed to meet in a productive middle.
  • They have a mascot, like a dog or something, I've never actually seen this, but hey, it would definitely help get me over the line.


Buying a system is like renting a house.

You use it however you need it, while someone else takes care of the maintenance. And I mean... if you get along with your landlord and see this as the right house, there's nothing wrong with renting.


The last thing I'll say is that like any good adulting decision, sleep on it. Let the hype settle, and if you still like the decision, then go ahead and do it. You've got to do something...


Note: I completely understand the irony of that sentence from a thirty-year-old who still writes and behaves like a child... I bought that Grammarly subscription, though, so it's harder for you to know that I'm a moron.


Next time: how you'll actually buy a drone fleet. 



Have a great day.



[This was originally sent to my logistics email newsletter]