The Computer Challenge: Choosing the Right System

There is no single perfect strategy to finding the computer system that best meets your company’s needs, but the advice experienced recyclers offer here can help. 

By Kent Kiser

Kent Kiser is an associate editor of Scrap Processing and Recycling.

So you’ve decided to take the plunge and invest in a new computer system or upgrade an existing one for your scrap recycling company. Now what?

Not too long ago, you would have had only two options: Buy an off-the-shelf, generic computer package to run on the hardware you already own or plan to buy, or have an analyst and programmer custom-design a system to fit your needs. While these options are certainly still available, today you have the third option of buying a system from computer vendors that specialize in serving the recycling industry and offer hardware advice and scores of programs designed specifically for scrap recyclers.

These expanded choices add to the computer challenge, however: How do you decide which system and which vendor are best for your company? Since your computer system can be a major capital investment, and one that will affect the efficiency of your entire operation, it’s crucial that you make the right choice. You should select a computer system with the same thoroughness and careful consideration you’d use when buying any piece of processing or handling equipment.

Fortunately, you don’t have to reinvent the disk drive, as it were. Many recyclers have already headed down this road, and you can learn from their experiences--successes and mistakes.

The Critical Points

It may sound simplistic, but the success of your search rests on two factors, according to computer-savvy recyclers as well as vendors. First, you must have a clear understanding of your computing needs and goals. For instance, do you want to automate only part of your business, such your scale transactions or accounting department, or do you want a fully integrated system? DO you want your system to center on PCs (either Apple- or IBM-based), workstations, or traditional minicomputers? Do you want a text-only or graphics-display, Windows-type environment? “Knowing what and how you want to computerize will help you avoid bad mistakes,” offers Dan Peck, a manager at Peck Recycling Co. ( Richmond , Va. ), which is currently installing an integrated system. Indeed, most unsuccessful computer installations occur because the customers “didn’t do their homework on the front end,” says one vendor.

You can identify your needs and goals through something as simple as drafting a computer wish list in-house, or something as elaborate as hiring an outside consulting firm to conduct a full-blown needs analysis. Sure, you won’t be able to pinpoint everything, and your computer goals may change after you see what the various systems can do. Peck Recycling, for instance, started out wanting simply to improve its trucking and container tracking systems. But once the firm saw the benefits of going with a companywide system, it broadened its vision and opted for the integrated approach. The important point to remember, however, is that if you don’t understand your needs and goals, you can hope to meet them.

The second crucial factor is to make sure your firm’s management personnel are involved in the selection process and committed to investing the time and resources necessary to make the new system work. “The most successful installations are those in which the financial, operations, and top management people have all spoken before the process begins,” says a computer professional. “You must get the top-level people to take a role in both selection and implementation of the system."

Reviewing the Process

After addressing these two “musts," it's time to set a budget. "We advise our customers to make that determination first," a vendor says. "That way, they can see right away if they're a good candidate or not for a particular system.”

Next, you need to decide whether you want to conduct your computer search yourself or use an independent consultant, as Hugo Neu & Sons Inc. ( New York City ) did. In 1989, the firm hired a consultant to draft a questionnaire based on its computer needs, send the questionnaire to scrap-specific computer specialists, and analyze the responses. "We simply told the consultant, 'Here's what we're looking for in an ideal system, and you tell us which vendor out there can do it best,"' says Tom Boud, internal auditor. "We didn't have the time to do the legwork ourselves." The company particularly wanted a system that could automate the scrap purchase functions-and eliminate as much keypunching as possible--at its processing plant in Terminal Island , Calif. The consultant found only one system that could adequately meet this need, so Hugo Neu took its recommendation and has been computing happily ever since.

If you choose to do the search yourself, as the majority of scrap companies do, you can begin with phone calls to the major vendors. These initial "hand-shake" conversations will give you a feel for the vendors' services and give them a chance to "roughcut what the potential customer needs," as one computer representative puts it. "In the initial conversation, we must determine the customer's level of sophistication in computers and what they're seeking."

After your call, the next step is typically for the vendor to mail you a packet of literature describing its systems. If you're still interested after reviewing this information, the process enters the "personal contact" stage, with the vendor usually visiting your facility to study your operations and conduct an on-site demonstration of its programs. "Visiting the customer site gives us a good idea what the company is really doing," says one computer expert, "and it also allows more of the customer's employees to see our demonstration than if we did it at our offices." Even so, you will invariably be invited to visit the vendor's headquarters to examine its products in greater depth and meet its staff.

Along the way, most vendors will also ask you to fill out a questionnaire or site survey, which enables them to pinpoint your needs and size the system properly--ensuring that you'll have enough disk drive capacity but, for the sake of cost control, not too much to meet your needs. "In a nutshell, these surveys establish what you're doing now with computers, if anything, and what you want to do in the future," says a computer rep. "The survey is essentially a roadmap that helps us configure our software to match a customer's paperwork."

You should do some surveying as well, the experts on the recycling and computer sides advise: Check the vendor's references and, if possible, visit another user's facility to see the system up and running. If you like what you hear and see, and let the vendor know, the computer company will prepare a quote and contracts that describe your proposed system and their services, covering such elements as software use, maintenance, service, and source code licensing rights. (The source code-a system's actual program code produced by the vendor-is necessary for modifying a system, but most customers don't purchase these rights.)

Evaluating the System

Now that you know how the computer “courting" process will go, you still have to decide which system to choose. But what makes a system good? According to most recyclers and computer vendors, you should look for the following characteristics.

Easy to use. To get the maximum benefit out of your computer system, your employees should be comfortable working on it and understand how to operate it. As one computer representative notes, "If a system is too difficult to use, it doesn't matter how many features it has or how powerful it is." To this end, the system's operation should be well-documented in easy-to-understand manuals and guides. Another consideration is how consistent the system is from application to application--in other words, if you learn how to operate one part of the system, can you use that knowledge to easily work another part?

Functional. To Robert Eller, data processing manager for Louis Padnos Iron & Metal Co. ( Holland , Mich. ), the most important attribute of a computer system is functionality--its ability to produce tangible benefits for the company, such as streamlining operations, making staff more productive, and generating reports that help management make better decisions. "What will the system do for us in real terms?" Eller asks. "Does it offer any return, or does it just make things look fancy? Recyclers are looking for functionality as opposed to fluff." One vendor echoes this sentiment, asserting, "The real advantage of having a computer system is the ability to get information that's meaningful to running your business with the touch of some keys or the click of a mouse."

Customer-service oriented. As part of helping you operate better, a system should enable you to improve your customer service. This can be in the form of faster over-the-scale transactions, quicker payments, better management of customers' accounts, and more.

Flexible. Can the system be modified, expanded, and/or networked easily to fit your company's current needs and grow as those needs change? "The vendor must be able to customize the system when customization is needed--and smoothly, too--instead of making you fit into what's already been developed," says Ben Zager, vice president of Ansam Metals Corp. (Baltimore), which is installing an integrated system over the course of several years.

While most system modifications are usually done by the vendor, recyclers can do them in-house if they have a staff programmer and if they've purchased the rights to alter the software. One vendor makes it a point to show its customers how to make minor changes themselves "so they're not enslaved to anyone when they want to make modifications," says the firm's president. "We want to do the high-end modification work for our customers, but they can usually handle little tweaks themselves." Peck, for one, appreciates this kind of option. "The software should be able to be altered with relative ease," he says. "It shouldn't be like pulling a tooth. We need to be able to alter our reporting as our information needs change."

You can also judge the flexibility of a system on two other points. First, how easy is the system to network? Is the networking capability built into the operating system, or must it be added on? And second, how portable is the system? That is, can you tap into it from remote locations using a laptop computer? This is an important attribute to recyclers on the go. "It makes life easier when traveling," says Alan Jay Perlman, president and chief executive officer of F. Perlman & Co. Inc. ( Memphis , Tenn. ), which recently automated three of its five operations. "Rather than spending a lot of time on the phone, I can get into the system wherever I am and look for what I want to find."

Cost. When evaluating what a system costs, says one expert, "don't focus on its up-front price. Look at what it will cost over time." To do this sort of life-cycle cost analysis, you have to look at such system expenses as supplies, administration, and training.

Reliable. Considering how much you'll probably rely on your computer system, you want to make sure it won't let you down and won't become outmoded. To protect against this, make sure your system's components are manufactured and backed by reputable companies that have a national network of vendors and support services, the experts advise.

Choosing a Vendor

A system is only as good as its vendor, so you may also want to consider these vendor factors in your search.

Computer expertise. This may seem obvious, but a vendor's computer knowledge should extend beyond simply knowing the ins-and-outs of its own systems. The vendor should be able to demonstrate how you can use computers as a tool to improve all facets of your business. "Go with a firm that not only knows what it's doing," says Ansam's Zager, "but also can show you how your manual functions can be done electronically."

Industry experience. As one vendor expresses so well, "There are thousands who know computers, but industry experience is critical." When a computer company understands the scrap recycling industry, he explains, the firm has that much better of a chance of understanding your unique problems and operating patterns. "Whoever sells you software better know your business," Peck asserts. "You shouldn't have to spend time explaining your business."

Track record. Does the vendor have successful installations at other recycling businesses? Does it have staying power? "The computer industry is changing so rapidly, so we really wanted a firm that was going to be around a while," notes Monte Panitz, executive vice president of F. Perlman.

Service. Most recyclers choose a vendor primarily based on the service it can provide. "A scrap operation needs to have support," Peck says. "We shouldn't have to be computer jockeys." What this means is finding a vendor that can offer prompt, professional service in the areas of user support, training, system repairs, customization, and upgrades.

One way to judge a vendor's service potential is to look at how many people it has to support you-in other words, "how deep is its bench?" asks one vendor. Talking to the technical staff can also reveal a lot. You'll come to rely on these people for answers to questions about your system once it's in place, so be sure they're personable people you can get along with, advises one computer expert. "If you don't like the technical people, don't buy the software." Also, find out how the vendor can service you-on-site and/or off-site, by traditional modem or by the newer, faster fiber-optic integrated services digital network (usually referred to as ISDN).

Of equal importance is whether the vendor is accessible and easy to reach when you have questions or problems. "Customers need to know you're going to be there when they need help," one computer rep notes. "They want to see you and want to make sure you're available." As Peck remarks, "The reality is that it takes human beings to help you when you're having problems."

Openness. As in most business relationships, open communication is essential to success, and this can apply to such points as how the system works, how it is networked, and how you can make minor modifications in-house. "We think our customers should know everything," says one computer company representative, who notes that he likes to prepare his quotes in front of his potential customers. "That way, there's no question about how we arrived at a certain number. We explain everything we've recommended in our quote books, not just in numbers but also in words."

Comfort level. When all other tangible factors are considered, there's one intangible point you should consider: Which vendor do you feel most comfortable with? "At the end of the process, recyclers usually say they evaluated everything the best they could, but it's impossible to dot every i and cross every t," explains one vendor. "They simply reach a comfort level with a particular company."

Put these guidelines together and analyze your findings, and you've met the computer challenge. While it can be a time-consuming process and should never be taken lightly, selecting the right system and vendor is becoming increasingly important to business success in the scrap industry. "The fact is," says one computer expert, "that eventually everybody is going to have to operate using a computer system, and it better be a good one."

Good Advice

When it comes to installing or upgrading a computer system, every recycler and vendor has a few special words of wisdom. Following are some choice tips that can help you get the most out of your system.

Try to think of all the features you want in your system before it's installed. This will save the vendor from having to make what one calls "combat modifications" on-site, and it will keep your costs down.

Invest in training. If you believe, as many do, that your employees are your company's most valuable asset, then give them the computer knowledge they need to truly perform. Training your employees will not only make the installation go smoother, but also ensure that you get maximum benefit from your system. "We probably spent as much on training as we spent on the program itself, and that was by design," says Perlman. 'We feel it's very important for our people to understand what they're doing and not just pushing buttons." Yes, training can be expensive, especially if you have the vendor train your people at your plant, but as Perlman notes, 'The training is going to save you money in the long run, so don't skimp on it."

Anticipate and be sensitive to employee concerns. Automating your operations is bound to bring changes that can mean reducing staff, reassigning people, or reallocating work. Tell your employees up front what the system could mean and listen to their opinions. "Management needs to have a plan as to how they're going to handle these issues," advises one expert.

If you've selected an integrated system, consider phasing it in over time to help spread out the cost of the system and ease your staff into its operation. "Don't try to do it all at once," a vendor asserts. "It's just too big of a shock. Get part of the system in, get it working, then take it to the next phase."

Push the envelope when it comes to getting the most out of your system. "Most customers have a set of expectations and, after they're met, they don't push beyond that," says a computer professional.

Expect changes. 'There's no software package that will be perfect," one vendor says. "Customers can't expect a software package to operate their business exactly like it operated before. They'll have to be able to make some changes and compromises. If they aren't willing to do that, then they should consider not installing a system."  •