Saving Costs in a Down Economy

Written February 8th, 2009 by
Categories: CEO's Blog
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Companies invest in SAP Integrated B2B sell-side eCommerce websites for two reasons.  Either they want to: (1) provide their customers a better order management experience or (2) they want to save on internal processing costs.

Three of my earlier posts dealt with improving customer service.  Read “We Don’t Need No Stinkin’ Website“, “Walk In Your Customer’s Shoes” or “AMR Benchmarks the Value of Sellside eCommerce” for more on the value side of the equation.

Over the last several months we’ve gotten a lot of first hand knowledge about where the costs savings come from when you implement our real time integrated SAP B2B sell-side eCommerce website service.  Today we’ll begin those discussions.

The bottom line is that entering an order into your SAP system is too difficult.  Check out all the yellow sticky notes in your Customer Service Reps (CSR) cubicles.  Those are all “work-arounds” for bad data or missing processes in your SAP system.  Seems as if it’s easier to train your CSRs to execute these workarounds than to get your IT organization to fix them once and for all.

That’s why you need a bank of Customer Service Reps.  What should be a simple process has devolved into a complex one that takes time to deal with. CSRs have accumulated all of the tribal knowledge required to place a well formed order into your SAP system.  They know that when a customer asks for Product A, they really need to get Product B because Product A hasn’t been available for months but it hasn’t been discontinued in SAP yet.  Your CSR’s know that since you don’t have ATP set up to check all of your warehouses for inventory they have to manually check each of them before you apologize to your customer for being out of stock.

The more orders you take, the more CSRs you need.  Unless you commit to eliminate the process waste embedded in your CSR’s tribal knowledge, the situation will never improve.  Therein lies the secret to our success.  A commitment to making your SAP system transparent to your customers is a commitment to cleaning it up.  And a commitment to cleaning up your SAP system is a commitment to sustainable cost savings.

If you are going to open your Kimono, you better look good!

In my earlier post entitled “Are You Hiring?“, I presented the thinly veiled results of our experiences with Nordson/EFD.  Within 60 days of going into production we were able to free up at least 2 CSRs from their routine order management responsibilities. That inspired me to put together this cost savings calculator.

This should help us start the discussion of how much cost savings you can expect once you decide to integrate our B2B sell-side eCommerce service with your SAP system.

Insert values into the yellow cells and read your potential cost savings in the green cells.  Embedded in this model are some of our learnings of the past several months:

  1. For every order placed on the web, customers come back 3 more times to check on status, track the delivery or download relevant documents.
  2. Orders don’t have to be placed on the web in order to be tracked on the web.
  3. The time to “enter” and order isn’t just “typing” time.  It’s the time required to research the order, fix issues with the order, have discussions with the customer etc.
  4. It really shouldn’t take more than 60 days from project start to first production order taken over the web.

Like any other model, this one probably produces more questions than provides answers.  But it’s a start and hopefully provides you some value…and that’s the Agile point.  Start delivering value as soon as you can and find ways to deliver more of it over time.

Sam