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Creating an E-Commerce Scorecard

#AribaLIVE
@ariba

© 2014 Ariba – an SAP company. All rights reserved.
E-Commerce Maturity Requires
Resources and Infrastructure

E-Commerce
Business Value

Innovative

Proactive

Responsive
Re...
E-Commerce Scorecards Measure and
Justify These Investments

VISIBILITY

 Set expectations

 Showcase
successes

FOCUS

...
Today’s Presenters

•

HP
Robert Calvert, Worldwide B2B Integration Strategy

•

Fastenal
Michelle Meyer, eCommerce Sales
...
HP Experience with B2Bi and Ariba

Began
with ORMS
and a CIF
Catalog

Moved
to Network
and expanded
to dedicated
PunchOut
...
E-Commerce Scorecard

Cost of Sales

Revenue

Length

Order Entry Costs

Margin

Width

Order Management
Costs

Days Sales...
E-Commerce Scorecard
Operational Efficiency
Cost of Sales
Order Entry Costs

Measure e-Penetration of integrated orders to...
E-Commerce Scorecard
Cash Management
Revenue
Margin

Measuring Margin will help drive
balanced growth

Days Sales Outstand...
E-Commerce Scorecard
Capabilities
Length
Width

Measure capabilities across regions and
product lines

Depth

9

Measure c...
Our Capability Scorecard
Build your matrix
Measure against your matrix
• Grade yourself aggressively
• If you measure @ 10...
Our Capability Scorecard –
How To
Build your matrix

•
•
•
•

Across Regions, Routes to
Market, Countries, and Goods & Ser...
E-Commerce Scorecard: Summary

Cost of Sales

Revenue

Length

Order Entry Costs

Margin

Width

Order Management
Costs

D...
Today’s Presenters

•

HP
Robert Calvert, Worldwide B2B Integration Strategy

•

Fastenal
Michelle Meyer, eCommerce Sales
...
Who Is Fastenal?
•

“The Blue Team:” local stores and local people
3,000+ store locations with 10,000+ employees
Global so...
Our E-Commerce Overview:
Past/Present
Goal: to provide increased business efficiencies and soft savings for ALL parties
61...
Fastenal’s E-Commerce Scorecard
Key Performance Indicators:

•
•
•
•
•

16

Hitting 45-60 day go-live for new customer int...
Success Story
•

7-Year Customer via Ariba ($2M sales/year)
370 accounts nationwide with high volume of both transactions ...
E-Commerce Scorecard:
Best Practices at Fastenal
Prioritizing Customer
E-Commerce Projects

•

Volume of sales
Contract pr...
Considerations for E-Procurement
and Onboarding Teams
Commitment

•

Buy-in with all areas:
Business
IT
Procurement

19

©...
Today’s Presenters

•

HP
Robert Calvert, Worldwide B2B Integration Strategy

•

Fastenal
Michelle Meyer, eCommerce Sales
...
Company Overview

21

© 2014 Ariba – an SAP company. All rights reserved.
Learn, Shop and Manage on Insight.com
Information and Resources, Customization, Tools and IT Lifecycle Cycle Management

2...
Our Evolution with E-Commerce and Ariba
2012

1996

2004

Initial launch of
Insight.com

Electronic invoicing
(cXML)

Firs...
Our Experience with E-Commerce and Ariba
109
clients

24

© 2014 Ariba – an SAP company. All rights reserved.

150,000
ord...
Our E-Commerce Scorecard
Key Business performance metrics:
Total sales through E-Commerce channels
Share of E-Commerce tra...
Our E-Commerce Scorecard – Sample

Distribution of Orders by Input
Method - Overall

44%

56%

Direct Sales
Electronic Sal...
Success Story

$

1996

~100x Increase in Revenue
20 teammates
•

eCommerce Operations
Team

•

eCommerce B2B
Implementati...
Insight’s E-Commerce Best Practices

•

Strategic:
Strong Executive Sponsorship
–
–

Internal investment – financial/opera...
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Creating an E-Commerce Scorecard

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E-Commerce doesn’t just happen. It takes a coordinated effort of several different parts of the organization including Sales, Marketing, IT, and Finance to make it run smoothly within an organization.

In this session, leading e-commerce sellers will talk about how they developed their e-commerce teams to be able to respond quickly, efficiently, and effectively to multiple and varied buyer e-commerce integration requests.

Published in: Business, Technology
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Creating an E-Commerce Scorecard

  1. 1. Creating an E-Commerce Scorecard #AribaLIVE @ariba © 2014 Ariba – an SAP company. All rights reserved.
  2. 2. E-Commerce Maturity Requires Resources and Infrastructure E-Commerce Business Value Innovative Proactive Responsive Reactive Comply with First Customer Request Address Additional One-off Requests Enablement 2 Create Processes, Infrastructure and Resources Transformation Phases of Seller Evolution © 2014 Ariba – an SAP company. All rights reserved. Expand Collaborative Channel and Poise for Growth
  3. 3. E-Commerce Scorecards Measure and Justify These Investments VISIBILITY  Set expectations  Showcase successes FOCUS IMPROVEMENT  Define the  Measure results E-Commerce focus  Align with business goals 3 © 2014 Ariba – an SAP company. All rights reserved.  Improve upon them
  4. 4. Today’s Presenters • HP Robert Calvert, Worldwide B2B Integration Strategy • Fastenal Michelle Meyer, eCommerce Sales • Insight Mike Guggemos, CIO 4 © 2014 Ariba – an SAP company. All rights reserved.
  5. 5. HP Experience with B2Bi and Ariba Began with ORMS and a CIF Catalog Moved to Network and expanded to dedicated PunchOut store Consolidated our PunchOut store with our extranet Consolidation of Compaq and HP How B2Bi and Ariba provide advantages: Operational efficiency as a disadvantage 5 © 2014 Ariba – an SAP company. All rights reserved. Competitive parity and differentiation as an advantage Introduction of OC/SN/ Invoice
  6. 6. E-Commerce Scorecard Cost of Sales Revenue Length Order Entry Costs Margin Width Order Management Costs Days Sales Outstanding/ Avg Days to Payment Depth Invoicing Costs 6 © 2014 Ariba – an SAP company. All rights reserved.
  7. 7. E-Commerce Scorecard Operational Efficiency Cost of Sales Order Entry Costs Measure e-Penetration of integrated orders to reflect savings from order entry (note value of non integrated) Order Management Costs Measure (or approximate) time not spent on order status due to OC and SN feeds Invoicing Costs 7 Measure Self Service via Catalog and PunchOut to reflect savings from quoting (note negative impacts) Measure costs of paper invoices versus PO Flip and e-Invoices © 2014 Ariba – an SAP company. All rights reserved.
  8. 8. E-Commerce Scorecard Cash Management Revenue Margin Measuring Margin will help drive balanced growth Days Sales Outstanding/ Avg Days to Payment 8 Measure both total and incremental revenue This metric must include assisted and unassisted revenue Measuring DSO will help drive cleaner sourcing and invoicing solutions © 2014 Ariba – an SAP company. All rights reserved.
  9. 9. E-Commerce Scorecard Capabilities Length Width Measure capabilities across regions and product lines Depth 9 Measure capabilities across lead to cash, source to settle, or procure to pay Measure capabilities across advanced features and complexity © 2014 Ariba – an SAP company. All rights reserved.
  10. 10. Our Capability Scorecard Build your matrix Measure against your matrix • Grade yourself aggressively • If you measure @ 100% in all areas you either lie to yourself or too narrowly define the matrix Define your Focus Areas • • 10 Don’t be afraid of undeveloped areas; but willingly choose not to invest Length and Width provide the best long term results; however, Depth can provide better short term results © 2014 Ariba – an SAP company. All rights reserved.
  11. 11. Our Capability Scorecard – How To Build your matrix • • • • Across Regions, Routes to Market, Countries, and Goods & Services Multiple hierarchies Define features to meet each hierarchy Define weighted percentages Measure against your matrix • • 11 Measure success against each feature for each Region, Routes to Market, Country, and Goods & Service Color code © 2014 Ariba – an SAP company. All rights reserved.
  12. 12. E-Commerce Scorecard: Summary Cost of Sales Revenue Length Order Entry Costs Margin Width Order Management Costs Days Sales Outstanding/ Avg Days to Payment Depth Invoicing Costs 12 © 2014 Ariba – an SAP company. All rights reserved.
  13. 13. Today’s Presenters • HP Robert Calvert, Worldwide B2B Integration Strategy • Fastenal Michelle Meyer, eCommerce Sales • Insight Mike Guggemos, CIO 13 © 2014 Ariba – an SAP company. All rights reserved.
  14. 14. Who Is Fastenal? • “The Blue Team:” local stores and local people 3,000+ store locations with 10,000+ employees Global sourcing, quality and internal logistics • OEM, MRO and Construction supplies Standard and custom products Inventoried and custom-stocked items • Decentralized environment A flexible approach to supporting local customers Sourcing products, making emergency deliveries, managing a lean flow of inventory Using our corporate resources to be the best local supplier in every market we serve 14 © 2014 Ariba – an SAP company. All rights reserved.
  15. 15. Our E-Commerce Overview: Past/Present Goal: to provide increased business efficiencies and soft savings for ALL parties 615+ 507 10% 250 218 1% 5 Years Ago Current % of Company Sales 15 © 2014 Ariba – an SAP company. All rights reserved. 32 5 Years Ago 108 Current Trading Partners
  16. 16. Fastenal’s E-Commerce Scorecard Key Performance Indicators: • • • • • 16 Hitting 45-60 day go-live for new customer integration projects Number of NEW customer integrations per month Total sales dollar growth through E-Commerce channel monthly/yearly % of Sales through E-Commerce channel vs. traditional channel Sales growth of each newly implemented customer © 2014 Ariba – an SAP company. All rights reserved.
  17. 17. Success Story • 7-Year Customer via Ariba ($2M sales/year) 370 accounts nationwide with high volume of both transactions and sales – Consistent product/pricing +100 eQuotes to PunchOut per month – Local Fastenal store recommends products for PO 100% via Ariba (no paper orders/invoices) – 17 Day-to-day efficiencies for ALL parties, especially Customer Procurement © 2014 Ariba – an SAP company. All rights reserved.
  18. 18. E-Commerce Scorecard: Best Practices at Fastenal Prioritizing Customer E-Commerce Projects • Volume of sales Contract pricing • Customer urgency Hard Go Live • Level of complexity Standard transactions 18 © 2014 Ariba – an SAP company. All rights reserved. Project Commitment • Customer & Fastenal Business IT Procurement Success of Project • • Project timeframe Use of channel PunchOut/eQuotes Transactions • Increase in eSales
  19. 19. Considerations for E-Procurement and Onboarding Teams Commitment • Buy-in with all areas: Business IT Procurement 19 © 2014 Ariba – an SAP company. All rights reserved. Communication • • • Project scope Testing period Joint Go Live Internal Training • Training plan Topics How to deliver • Drive compliance
  20. 20. Today’s Presenters • HP Robert Calvert, Worldwide B2B Integration Strategy • Fastenal Michelle Meyer, eCommerce Sales • Insight Mike Guggemos, CIO 20 © 2014 Ariba – an SAP company. All rights reserved.
  21. 21. Company Overview 21 © 2014 Ariba – an SAP company. All rights reserved.
  22. 22. Learn, Shop and Manage on Insight.com Information and Resources, Customization, Tools and IT Lifecycle Cycle Management 22
  23. 23. Our Evolution with E-Commerce and Ariba 2012 1996 2004 Initial launch of Insight.com Electronic invoicing (cXML) First global customer implementation 1999 Supported both Punch-out and .CIF 1st Ariba supplier connection Software Spectrum – acquisition 23 2006 © 2014 Ariba – an SAP company. All rights reserved. 2005 First single order transmitted for over $1 Million Launch of Global Landing Page to consolidate client entry points 2008 to current Over 300 active relationships, many with global reach
  24. 24. Our Experience with E-Commerce and Ariba 109 clients 24 © 2014 Ariba – an SAP company. All rights reserved. 150,000 orders 103,000 invoices
  25. 25. Our E-Commerce Scorecard Key Business performance metrics: Total sales through E-Commerce channels Share of E-Commerce transactions Growth in E-Commerce sales E-Commerce sales by segment, account manager, etc Client growth and retention 25 © 2014 Ariba – an SAP company. All rights reserved. Key IT performance metrics: • • • • Website performance metrics Time to onboard a new client E-Commerce clients – complexity (level of experience customization) New client implementations per month, per quarter, per year
  26. 26. Our E-Commerce Scorecard – Sample Distribution of Orders by Input Method - Overall 44% 56% Direct Sales Electronic Sales 26 © 2014 Ariba – an SAP company. All rights reserved. Distribution of Orders by Input Method - Enterprise Clients 55% 45% Direct Sales Electronic Sales
  27. 27. Success Story $ 1996 ~100x Increase in Revenue 20 teammates • eCommerce Operations Team • eCommerce B2B Implementation Team • eCommerce Technical 2 teammates 1 functional resource & 1 technical resource 27 © 2014 Ariba – an SAP company. All rights reserved. Team 2014
  28. 28. Insight’s E-Commerce Best Practices • Strategic: Strong Executive Sponsorship – – Internal investment – financial/operational Change Management E-Commerce Scorecard Review 28 © 2014 Ariba – an SAP company. All rights reserved. • Operational Implementation tool-sets allow for repeatable processes Cross-functional collaboration (Sales, IT and E-Commerce) Sales establishes project prioritization with defined criteria Flexibility is critical

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