Using Collaboration For Buy & Sell Side Success


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Analysts tout buyer and seller collaboration as the major aspiration of B2B e-commerce, but what does that actually mean? Two industry-leading Ariba customers – buyer and seller trading partners – explain how no-touch/low-touch collaboration on procure-to-pay and order-to-cash processes has reduced IT costs and manual work. This business process integration has helped AGCO gain more visibility and control in a multiple ERP environment, while also helping SHI International increase key operational and top-line metrics by more than 20 percent.

Eric Deese, Purchasing Analyst, AGCO
Tammy Wagner, Account Executive and John D’Aquila, eCommerce Operations Manager, SHI International

2012 Ariba Commerce Summit in New York City

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  • From Aberdeen Report: Supplier Networks v 2.0, dated April 201245% of supplier credentials and compliance documents exchanged on the network, which is 80% more than Laggards 46% use online supplier discovery over the supplier network, which is 60% more than Laggards. 60% of purchase orders are transmitted electronically through a supplier network, which is 62% more than Laggards From Aberdeen Report: AP Invoice Management in a Network Economy, dated May 2012 An average of 26% of BIC utilize some form of electronic invoice means such as Electronic Invoice Network, Procurement network with support for Electronic Invoices or Supplier Portals, which is and average of 3 times more than Laggards.
  • First and foremost is the idea of optimizing supplier collaboration (41%), which hinges on the ability to understand how to effectively communicate with suppliers and to optimize efficiency, accuracy and profitability. This collaboration starts with understanding supplier needs and priorities in allocating the proper resources with the buying organizations using supplier networks. If proper planning efforts are made, both buyers and suppliers can take advantage of integration infrastructure to accept and receive documents from one another in achieving a common goal of increasing commerce efficiency. Second, using a supplier network encourages suppliers to increase transactions in an automated electronic basis especially, P2P based transactions such as purchase orders, payments and change orders. For example, 72% of respondents indicated they are using purchase orders through a supplier network, 59% use invoices and 54% use change orders. As adoption looks to be increasing for supplier networks, electronic processes being considered in the next year include many non-transaction based areas such as sharing of compliance documents (e.g. sustainability, conflict minerals, other regulatory documents) (31%), use of sourcing/RFPs (25%) and dynamic discounting strategies (24%). Third, through the use of supplier networks, organizations create an audit trail of transaction activity that can be used for increasing transparency into a specific process status that can ultimately result in reduced costs and increased efficiencies (i.e. identifying where a payment is, finding an order number, recognizing a supplier ID). In terms of reduced cost, the cost to complete a single requisition to order cycle in ($USD) was $33.45 for those not using a supplier network compared to $22.30 for those using a supplier network. In terms of efficiency, the average number of days to complete a requisition to order cycle averaged 15.5 days for those not using a supplier network versus 11.2 days for those using one.
  • In addition to higher revenue and ROI, BIC respondents experienced notably better benefits from their e-commerce efforts than non-BIC companies in various qualitative areas (shown on Chart 2), including: Enhanced Customer Satisfaction: 84.6 percent of BIC companies reported that their online and e-commerce capabilities had improved customer satisfaction somewhat or greatly (50 percent said greatly) as opposed to 52.9 percent of others (only 15.1 percent of whom said greatly). In terms of the actual percentage realized—i.e., the degree to which customer satisfaction actually increased—BICs experienced a 57.7 percent gain, whereas others saw just a 26.7 percent improvement.Greater Customer Traction: 46.2 percent of BIC companies experienced an improvement in customer retention as a result of their e-commerce and online capabilities versus 20.1 percent of others, while the actual percentage of improvement was 48.3 percent for BICs as opposed to 35.1 percent for other companies.Higher Productivity in Sales and Account Management: A total of 34.6 percent of BICs stated that e-commerce had boosted their sales/account management productivity, whereas only 25.3 percent of others experienced a similar gain. While improvements in other categories were not as dramatic, BICs consistently reported a higher level of benefits than less mature organizations, bearing out the importance of a more comprehensive e-commerce strategy in driving greater overall ROI.
  • Now let me introduce our buyer – Eric Deese Eric is a Purchasing Agent for AGCO. He has been with AGCO for 5 years, currently in purchasing the last 3. He grew up in Snellville, GA and graduated from Auburn University with a Degree in Agriculture Business Economics. Eric is the eCommerce Purchasing Team Lead for AGCO north America and is responsible for all enablement at AGCO. Additionally, he makes all the IT purchases for AGCO North America and is responsible for approving all requisitions that consist under $50K.   Now, let me introduce our sellers –  John D’Aquila is the eCommerce Operations Manager at SHI and is responsible for the customer enablement as well as the catalog creation and data quality. John has been with SHI for 12 years and has been working in the SHI eCommerce department since 2003. Additionally, he spent two years in the Accounts Receivable department, so he knows the value of electronic invoicing. SHI has been working with Ariba customers since 1999, almost the beginning, and they have really optimized their enablement and catalog capabilities to facilitate fast deployment and immediate customer value.  Tammy Wagner is an Account Executive at SHI working with AGCO. She has been with SHI for 9 years and is responsible for managing and supporting 18 Enterprise commercial customers. She has worked extensively with SHI’s customers to help them understand the ecommerce options that SHI offers and working with John and his team, works to provide first class customer service while keeping their customers’ best interest in mind.
  • Using Collaboration For Buy & Sell Side Success

    1. 1. Collaborative Commerce: ABuyer/Seller PanelA Panel Discussion © 2012 Ariba, Inc. All rights reserved.
    2. 2. Leveraging Supplier Networks Profiling BIC vs. Laggards * * * **2 © 2012 Ariba, Inc. All rights reserved. *Source: Aberdeen Research, “Supplier Networks v2.0” April, 2012 ** Source: Aberdeen Research, “AP Invoice Management in a Networked Economy” May 2012
    3. 3. Buyer Goals Buyers’ Top Strategic Goals for Supplier Networks 41% 37% 31%3 © 2012 Ariba, Inc. All rights reserved. Source: Aberdeen Research, “Supplier Networks v2.0” April, 2012
    4. 4. Financial Rewards to BIC approach Has e-commerce efforts increased Has e-commerce efforts increased revenue with new customers? revenue with existing customers? (% answering Yes) (% answering Yes) 60.0% 60.0% 50.0% 50.0% 40.0% 40.0% 65.4% 65.4% 30.0% 30.0% 20.0% 37.8% 20.0% 33.3% 10.0% 10.0% 0.0% 0.0% Best-in-Class* All Others Best-in-Class* All Others BIC companies realized an BIC companies realized an average of 36.1% higher average of 39.8% higher revenue in new accounts as revenue in existing accounts as opposed to 29.5% for other opposed to 29.4% for other *Segmentation driven by • Revenues derived through online channels • Self-reported sophistication N=624 © 2012 Ariba, Inc. All rights reserved. Source: Selling Power Survey, 2011
    5. 5. Happier Customers, Stronger Relationships5 © 2012 Ariba, Inc. All rights reserved. Source: Selling Power Survey, 2011
    6. 6. Introductions • AGCO Eric Deese, Procurement Agent • SHI Tammy Wagner, Account Executive John D’Aquila, eCommerce Operations Manager • Questions6 © 2012 Ariba, Inc. All rights reserved.
    7. 7. AGCO Overview • Worlds third largest farm equipment manufacturer. • Headquartered in Duluth, GA • Formed in 1990 by management buy-out • Over 20 highly successful acquisitions have grown revenue to $7 billion • Full line provider of equipment including tractors, combines, hay and forage tools, sprayers and tillage equipment. • Global distribution network in over 140 countries. • Well known brands include: Massey Ferguson, Challenger, Fendt and Valtra.7 © 2012 Ariba, Inc. All rights reserved.
    8. 8. SHI STORYGlobal provider of IT Products, Services and Solutions24-Year Anniversary in Nov 2012 !• 100% Organic Growth (35% CAGR) since 1989$ 4.2 Billion Projected Revenue in 2012• $ 3.8B ‘11 (28% vs ’10); $3B ‘10 (25% vs ‘09)• Doubled Revenue since 2009. ($ 2.2B in ‘09)Expertise & Proven Track Record• Largest Enterprise VAR• Largest global SW VAR / Licensing Expertise• Best Value in commodity IT. ( Best Price )• Extensive Value Solutions & Portfolio• Innovative IT Asset Management Solutions• Next Generation Cloud Platform• Largest Woman & Minority owned Business in North America. Same ownership 24 yrs SHI Confidential