Building the Business Case for E-Commerce

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  • Collaborative business eCommerce is an evolutionary process for both buyers and sellers - On both sides, there are opportunities to grow together with your customers or your supply base.From a Seller perspective, perhaps you are Reacting to your first customer requests for an ecommerce connection, or as an organization you have moved up the maturity curve to be able to Respond to multiple customer requests, but your company still views eCommerce as an “Enablement Technology” as opposed to an “Transformational technology.”Companies that utilize eCommerce to Transform with businesses really have put the effort and resources behind creating an establish repeatable process for expanding their footprint across geographies and to multiple trading partners. Even to the point of bringing innovative or products/services and funding key differentiational products/services to enable them to proactively capture, retain and grow customer revenue, loyalty and satisfaction. <CLICK>In a recent survey conducted by Ariba in partnership with Selling Power, 19% of companies identified themselves as Reactive46% of companies identified themselves as Responsive20% of companies identified themselves as Proactive11% of companies identified themselves as InnovativeThe remaining did not identify themselves<CLICK>This represents 65% of companies still in this Enablement mindset. <CLICK> When we interviewed companies, many are struggling with how to move up the maturity curve to transformational mindset and how to build a business case to move towards transforming their company to an eCommerce Innovator.So with that in mind, our two speakers today will speak about how they built a business case and determines an ROI for their investment in driving eCommerce innovation within their respective companies.
  • Collaborative business eCommerce is an evolutionary process for both buyers and sellers - On both sides, there are opportunities to grow together with your customers or your supply base.From a Seller perspective, perhaps you are Reacting to your first customer requests for an ecommerce connection, or as an organization you have moved up the maturity curve to be able to Respond to multiple customer requests, but your company still views eCommerce as an “Enablement Technology” as opposed to an “Transformational technology.”Companies that utilize eCommerce to Transform with businesses really have put the effort and resources behind creating an establish repeatable process for expanding their footprint across geographies and to multiple trading partners. Even to the point of bringing innovative or products/services and funding key differentiational products/services to enable them to proactively capture, retain and grow customer revenue, loyalty and satisfaction. <CLICK>In a recent survey conducted by Ariba in partnership with Selling Power, 19% of companies identified themselves as Reactive46% of companies identified themselves as Responsive20% of companies identified themselves as Proactive11% of companies identified themselves as InnovativeThe remaining did not identify themselves<CLICK>This represents 65% of companies still in this Enablement mindset. <CLICK> When we interviewed companies, many are struggling with how to move up the maturity curve to transformational mindset and how to build a business case to move towards transforming their company to an eCommerce Innovator.So with that in mind, our two speakers today will speak about how they built a business case and determines an ROI for their investment in driving eCommerce innovation within their respective companies.
  • Collaborative business eCommerce is an evolutionary process for both buyers and sellers - On both sides, there are opportunities to grow together with your customers or your supply base.From a Seller perspective, perhaps you are Reacting to your first customer requests for an ecommerce connection, or as an organization you have moved up the maturity curve to be able to Respond to multiple customer requests, but your company still views eCommerce as an “Enablement Technology” as opposed to an “Transformational technology.”Companies that utilize eCommerce to Transform with businesses really have put the effort and resources behind creating an establish repeatable process for expanding their footprint across geographies and to multiple trading partners. Even to the point of bringing innovative or products/services and funding key differentiational products/services to enable them to proactively capture, retain and grow customer revenue, loyalty and satisfaction. <CLICK>In a recent survey conducted by Ariba in partnership with Selling Power, 19% of companies identified themselves as Reactive46% of companies identified themselves as Responsive20% of companies identified themselves as Proactive11% of companies identified themselves as InnovativeThe remaining did not identify themselves<CLICK>This represents 65% of companies still in this Enablement mindset. <CLICK> When we interviewed companies, many are struggling with how to move up the maturity curve to transformational mindset and how to build a business case to move towards transforming their company to an eCommerce Innovator.So with that in mind, our two speakers today will speak about how they built a business case and determines an ROI for their investment in driving eCommerce innovation within their respective companies.
  • Collaborative business eCommerce is an evolutionary process for both buyers and sellers - On both sides, there are opportunities to grow together with your customers or your supply base.From a Seller perspective, perhaps you are Reacting to your first customer requests for an ecommerce connection, or as an organization you have moved up the maturity curve to be able to Respond to multiple customer requests, but your company still views eCommerce as an “Enablement Technology” as opposed to an “Transformational technology.”Companies that utilize eCommerce to Transform with businesses really have put the effort and resources behind creating an establish repeatable process for expanding their footprint across geographies and to multiple trading partners. Even to the point of bringing innovative or products/services and funding key differentiational products/services to enable them to proactively capture, retain and grow customer revenue, loyalty and satisfaction. <CLICK>In a recent survey conducted by Ariba in partnership with Selling Power, 19% of companies identified themselves as Reactive46% of companies identified themselves as Responsive20% of companies identified themselves as Proactive11% of companies identified themselves as InnovativeThe remaining did not identify themselves<CLICK>This represents 65% of companies still in this Enablement mindset. <CLICK> When we interviewed companies, many are struggling with how to move up the maturity curve to transformational mindset and how to build a business case to move towards transforming their company to an eCommerce Innovator.So with that in mind, our two speakers today will speak about how they built a business case and determines an ROI for their investment in driving eCommerce innovation within their respective companies.
  • Collaborative business eCommerce is an evolutionary process for both buyers and sellers - On both sides, there are opportunities to grow together with your customers or your supply base.From a Seller perspective, perhaps you are Reacting to your first customer requests for an ecommerce connection, or as an organization you have moved up the maturity curve to be able to Respond to multiple customer requests, but your company still views eCommerce as an “Enablement Technology” as opposed to an “Transformational technology.”Companies that utilize eCommerce to Transform with businesses really have put the effort and resources behind creating an establish repeatable process for expanding their footprint across geographies and to multiple trading partners. Even to the point of bringing innovative or products/services and funding key differentiational products/services to enable them to proactively capture, retain and grow customer revenue, loyalty and satisfaction. <CLICK>In a recent survey conducted by Ariba in partnership with Selling Power, 19% of companies identified themselves as Reactive46% of companies identified themselves as Responsive20% of companies identified themselves as Proactive11% of companies identified themselves as InnovativeThe remaining did not identify themselves<CLICK>This represents 65% of companies still in this Enablement mindset. <CLICK> When we interviewed companies, many are struggling with how to move up the maturity curve to transformational mindset and how to build a business case to move towards transforming their company to an eCommerce Innovator.So with that in mind, our two speakers today will speak about how they built a business case and determines an ROI for their investment in driving eCommerce innovation within their respective companies.
  • Building the Business Case for E-Commerce

    1. 1. S Building the Business Case for E-Commerce Austin Whitehead, Ariba Cara Balint, Insight© 2012 Ariba, Inc. All rights reserved.
    2. 2. E-Commerce Evolution 11% Innovative 65% Expand Collaborative Commerce 20% collaborative Proactive channel and Business Value Establish poise for repeatable growth globally 46% Responsive processes while expanding the 19% Expand with footprint across Reactive additional geographies, Initial efforts to process and/or processes, address spend/ accounts business units, comply with trading partners customer requests Enablement Transformation Phases of Buyer and/or Seller Evolution *SOURCE: Selling Power Survey 20112 © 2012 Ariba, Inc. All rights reserved.
    3. 3. But How Do You Build a Business Case to Move up the Maturity Curve? Innovative Expand Collaborative Commerce collaborative Proactive channel and Business Value Establish poise for repeatable growth globally Responsive processes while expanding the Expand with footprint across Reactive additional geographies, Initial efforts to process and/or processes, address spend/ accounts business units, comply with trading partners customer requests Enablement Transformation Phases of Buyer and/or Seller Evolution3 © 2012 Ariba, Inc. All rights reserved.
    4. 4. But How Do You Build a Business Case to Move up the Maturity Curve? Innovative Expand Collaborative Commerce collaborative Proactive channel and Business Value Establish poise for repeatable growth globally Responsive processes while expanding the Expand with footprint across Reactive additional geographies, Initial efforts to process and/or processes, address spend/ accounts business units, comply with trading partners customer requests Enablement Transformation Phases of Buyer and/or Seller Evolution *SOURCE: Selling Power Survey 20114 © 2012 Ariba, Inc. All rights reserved.
    5. 5. What Kind of Company Are You? • Best Cost Model • Best Total Product • Best Total Solution • Competes on • Competes on best • Competes on most efficient product/service knowing customer cost model in marketplace better than they know themselves Operational Product Customer Excellence Leadership Intimacy • You must do at least one of these well CULTURE It’s About YOUR COMPANY’S •YOUR E-COMMERCE well You may do two of these BUSINESS CASE MUST • SUPPORT YOUR COMPANY’S CULTURE! Considered impractical/impossible to do all three well5 © 2012 Ariba, Inc. All rights reserved.
    6. 6. We Are Operational Excellence Lower cost of servicing customers 24% • If you are Operational Improved communications Operational Excellence with vendor 16% Excellence • Primarily Decreasing Faciliate faster payments 12% Costs focus Accelerated order-to-cash cycle 8% Product • How can I reduce the cost of 0% 10% 20% 30% manufacturing and delivering Leadership products or services? *SOURCE: Aberdeen Research • Aberdeen verifies benefits, primarily: Increased Sales Opportunities • How can I further reduce Lower cost of servicing customers Customer Intimacy my product/service cost to • Extends supplier reach beyond my customer? point-to-point approach • Reduced cost of adoption *SOURCE: Aberdeen Research6 © 2012 Ariba, Inc. All rights reserved.
    7. 7. We Are Product Leadership Have online channel changed the way you sell? (yes) Operational • How can I reduce cost to help fund product innovation/R&D Better differentiation of Excellence efforts? your products/services offering Best-in-Class All Others 0.0% 20.0% 40.0% 60.0% 80.0% *SOURCE: Selling Power Survey 2011 • If you are Product Leadership. Product • Primarily “First to Market” with Leadership innovated product/service. Increased sales 28% opportunities • How can I capture better data Improvements in 12% Customer to help develop innovative Customer Satisfaction Intimacy customer products and services? 0% 5% 10% 15% 20% 25% 30% *SOURCE: Aberdeen Research7 © 2012 Ariba, Inc. All rights reserved.
    8. 8. We Are Customer Intimacy Increased revenue from • How can I best service our new customers Operational customers in a cost-effective Increased revenue Excellence manner? from existing customers Increased retention rates Product • How can we build products Greater customer and services that anticipate Leadership our customers’ future needs? satisfaction Best-in-Class All Others 0.0% 20.0% 40.0% 60.0% 80.0% *SOURCE: Selling Power Survey 2011 • Gain an average of 36.6% increased Customer • If you are Customer Intimacy sales in new accounts Intimacy • Revenue/Sales focus • Gain 39.8% increase in existing accounts • Increase retention rates by 48%8 © 2012 Ariba, Inc. All rights reserved.
    9. 9. Speakers Today Cara Balint, Manager eCommerce Operations Insight Direct USA, Inc. Cara has spent her entire career, working with teams large and small to implement technology . Cara developed an eCommerce strategy at Insight that brought together 21 different international countries and divisions handling over 70% of all Insight’ business commerce transactions including regular multimillion- dollar online orders. Cara came to Insight from Software Spectrum as part of an acquisition in 2006, where she was eCommerce Client Ops Manager. In her role at Software Spectrum/Insight she oversees the implementation of a global eCommerce strategy. She has developed several highly effective methods that have successfully built the customer’s trust, and improved efficiencies resulting in increased growth within her department year over year.9 © 2012 Ariba, Inc. All rights reserved.
    10. 10. S Building the Business Case for E-Commerce Cara Balint Insight eCommerce Client Operations Manager© 2012 Ariba, Inc. All rights reserved.
    11. 11. Insight Overview • Founded in 1988, headquartered in Tempe, Arizona • $5.3 billion in revenues in 2011 • Approximately 5,300+ teammates worldwide • Operations in 23 countries, serving clients in 191 countries worldwide • Premier IT service offering with capabilities in Software, Data Center, Networking and Security • 2,500+ product and industry certifications • SAS 70 Certified Network Operations Center • Software lifecycle support for 80 percent of Global Fortune 500 • ISO 9001:2008 Certified Integration Lab and National Repair Center11 © 2012 Ariba, Inc. All rights reserved.
    12. 12. Insight and Ariba • Currently 24 active ANIDs and growing, supporting North America, EMEA and APAC regions • Just under 170,000 transactions took place between Ariba and Insight from November 2010 to November 2011 • Ariba Platinum supplier – 2010 • Approximately 70% of Insight’s eCommerce B2B transactions comes through Ariba12 © 2012 Ariba, Inc. All rights reserved.
    13. 13. The Things We Know and Do Today • When you get curious about something.. Anything…we go to Google or Bing What does that mean? • NY Times reported that 15% growth in 2011 over 2010 in online holiday shopping • Per ComScore, over 565,000 new businesses start each month. Over half of them start with a web page » The new store front..is your web page13 © 2012 Ariba, Inc. All rights reserved.
    14. 14. The Things We Know and Do Today • Automation is more efficient than manual • Take a Look Reduction in human error – % of orders submitted once verses % of orders resubmitted » manual entry verses automated entry Faster input – Time of human entry, from receipt to dispatch verses time of automated entry Faster payment – Order to cash manual verses automated. » Other items also influence this such as the way the payments are posted14 © 2012 Ariba, Inc. All rights reserved.
    15. 15. The Things We Know and Do Today Less overhead – Cost of personnel (wages, space, etc.) verses cost of system maintenance and management Easier to track trends – The use of tools like Coremetrics and Google analytics let you know where your customers are in your website and what they are doing. Better uses of resources – Sales can sell15 © 2012 Ariba, Inc. All rights reserved.
    16. 16. Target Savings to… • Technology that enhances the relationship: The Human Touch Online Chat – Real person with real answers Marketing Automation Tools – Sell what you know they want » Tools that track the users activity so you are prepared to offer what they are interested in Invest in “kindness” – “Please” and “Thank you” sound better with tone and inflection.16 © 2012 Ariba, Inc. All rights reserved.
    17. 17. What to Expect in ROI $714 $27 $769 $17 $0 $1,400 $0 $1,200 $1,000 $800 $91 $600 $329 $400 $200 $0 ($200) Ariba Fees Process Cost Savings Faster Payment Customer Self-Service VAN Cost Savings Mktg/Sales Cost Net Cost Savings Benefit New Revenue Growth in Accounts Avoidance Opportunities ($400) -$365 ($600)17
    18. 18. Common Pitfalls “Most Sellers are in E-Commerce as a direct result of satisfying a customers request.” Managing the solution is half the battle – Know how to present what you sell effectively » Easy navigation, good visuals, simple checkout » Cater to your target audience – Know what you can and can’t do » Don’t offer free over night shipping if you can’t deliver. » Have a Integration guide » Always offer a test site – Take A Look18 © 2012 Ariba, Inc. All rights reserved.
    19. 19. The Hidden ROI: The Trust Factor In 2011, Insight increased B2B/EDI revenue by 18% over 2010. For the first time in the company history, B2B/EDI revenue was 10% higher than the Web revenue. The Insight website had 12.3% more items ordered. The Insight website has 45% more customers than B2B or EDI customers. WHAT DOES THIS MEAN?19 © 2012 Ariba, Inc. All rights reserved.
    20. 20. The Hidden ROI: The Trust Factor • Large companies are recognizing the ease in the web, but they need security. • A B2B relationship secures the connection and brands it as a “Dedicated Relationship”. • A Supplier and a Buyer on the same “network” instills common knowledge. .20 © 2012 Ariba, Inc. All rights reserved.
    21. 21. Summary • The Internet is a common tool in todays world • Automation is a more efficient practice than manual processes • Investment in “Humanizing” technologies to be a differentiator • Large businesses are starting to see larger revenue in “dedicated connections” as they offer security in transactions21 © 2012 Ariba, Inc. All rights reserved.
    22. 22. Ariba Methodology Estimate Future Complete Gather “As-Is” Customer ROI Financial Costs and Revenue Compliance Costs Templates Potential Step Description 1. As-Is Cost Gather current costs of: Gathering • Compliance in PO, invoice, catalog processes • Customer care, inquiries and disputes • Working capital and accounts receivables • Sales and marketing costs 2. Future Cost Estimate future costs, savings, and revenue potential including: and Revenue • Catalog, order, invoice processing automation Estimates • Customer self-service • Increased accuracy • Reduced DSO and working capital costs • Sales and marketing costs • VAN costs 3. ROI Financial Populate financial templates Templates22
    23. 23. Areas of Opportunity and Data Gathering and Analysis Process Costs/Labor Costs Working Capital Costs Sales & Marketing • Catalog development, • Day Sales Outstanding • Customer retention programs publication, mailing costs Reduction (eInvoicing) • Customer retention rates • Order taking and PO • Total value of receivables • Customer acquisition processing • Typical payment terms and programs • Order confirmation and actual length of payment cycle • Customer conversion rates advance ship notice creation • Cost of capital • Year 1 revenues from new • Invoice entry and mailing costs customer • Customer care and follow-up • Steady state annual revenues • Accounts receivable follow-up per customer • Purchase order error rates • Invoice rejection rates • Customer inquiries & dispute resolution23 © 2012 Ariba, Inc. All rights reserved.
    24. 24. Key Ariba Benefit Drivers • Higher revenue by increasing wallet share 26-32% through increased buyer compliance • Increased revenues with new accounts • 15-20% reduction in days sales outstanding 6 to 25 days shaved off the cycle • 60-75% productivity gains for suppliers that fully automate their interactions with the Ariba Supplier Network • 45-60% increased accuracy in customer purchase orders • 20% reduction in invoice disputes24 © 2012 Ariba, Inc. All rights reserved.
    25. 25. Q&A25 © 2012 Ariba, Inc. All rights reserved.
    26. 26. Share This Session…NOW…from your mobile! • All presentations are posted: Guidebook mobile app – Search Apple or Android app store for Guidebook – Enter code “collabor8” Or at Slideshare.net/Ariba • Share via email or social media **Come back soon – we are syncing #AribaLIVE audio and video interviews to the presentations**26 © 2012 Ariba, Inc. All rights reserved.

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