Creating an E-Commerce Scorecard
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The document discusses creating an e-commerce scorecard to measure and justify investments in e-commerce maturity. It provides examples of metrics that can be tracked, such as cost of sales, revenue, and capabilities across different areas. Sample scorecards from HP, Fastenal, and Insight are presented that measure key performance indicators like sales growth through e-commerce channels and time to onboard new customers. The importance of executive sponsorship, cross-functional collaboration, and flexibility in implementation are highlighted as best practices for effective use of e-commerce scorecards.
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Creating an E-Commerce Scorecard
- 1. Creating an E-Commerce Scorecard #AribaLIVE @ariba © 2014 Ariba – an SAP company. All rights reserved.
- 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. Company Overview 21 © 2014 Ariba – an SAP company. All rights reserved.
- 22. Learn, Shop and Manage on Insight.com Information and Resources, Customization, Tools and IT Lifecycle Cycle Management 22
- 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. 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. 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. 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. 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. 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
Editor's Notes
- Messages:eCommerce maturity is tied to obtaining resources and infrastructureThe eCommerce scorecard measures and justifies these resources/infrastructure
- * Messages: executive visibility, team alignment with business goals, ??????
- Lead, CPQ, Order Capture, Order Mgmt, Invoicing, Payment, and Post Order SupportSecondary TierTertiary Tier
- Local product and local people: 3,000+ store locations with10,000+ people operating them. When our customers think of Fastenal, they don't think of some remote corporation; they think of the local "Blue Team" that serves them on a daily basis.Backed by our global sourcing, quality, and logistics operations, each store is a local, one-stop source for a spectrum of OEM, MRO and Construction supplies: standard and custom productsDecentralized environment, store personnel take a flexible approach to support local customers: sourcing products, making emergency deliveries, managing a lean flow of inventory to points of use, and leveraging our services, solutions and specialists to drive business improvements.* When you hear us talk about our thousands of stores, remember that we're not talking about how big we are; we're talking about how local we are. And that's what Fastenal is all about – using our corporate resources to be the best local supplier in every market we serve.
- Purple represents Ariba Trading Partners
- Initial launch of Insight.com – 1996Why? Client acquisition and client retention1st Ariba supplier connection – 1999 (Software Spectrum – acquisition)Why? Client retentionKey steps: 2006 electronic invoicesLesson learned: capture data required on invoice within inbound PO. It’s easier to implement eInvoices when electronic POs are completed first.2008-current: Through established processes and methodology, we’ve created a manageable and repeatable process that has proven successful2012 – Global landing pageThe global landing page allows those clients who do business with us across our ERP systems a single entry point, streamlining the user’s experience from an entry perspective
- Through our eCommerce and Ariba evolution, we have been able to drive:Operational efficiency – through automationCompetitive differentiation – through the ability to customize eCommerce solutions with our tool-setIncreased sales – supplier consolidationClient entanglement – proven flexibility and customization drives entanglement and partnership#’s109 clients utilize Ariba with InsightReceived 150K orders in 2013Transmitted 103K invoices through Ariba to our clients
- Business Performance MetricsMeasure sales through eCommerce solutions: B2B + traditional web vs. manual methods% of electronic transactions compared to manual methods (phone, email, fax)Monthly view of new client accountsOf our clients utilizing a B2B type solution – throughout Insight’s system and business transformation over the years, we’ve lost 1 client in 2013. IT MetricsWebsite performance metrics – site responsiveness, search type metricsOnboarding a new client – time required to implement from initial request to implementation dateComplexity level – level to which the experience is customized/personalizedCustomized: extremely customized, often requires IT involvement to setup initiallyConfigured: customized, yet can be managed by eCommerce business and/or sales teamsStandard: no customization – represents opportunity for entanglement1512 Customized (B2B, EDI, SPLA or GWP – customized with assistance from IT)13642 Configured (Approval routing, Custom catalog, Company Standards – configured by eCommerce/Sales)26,265 Standard (no customizations)
- Overall – our eCommerce orders account for 44% of the complete transactions we processWithin our Enterprise level clients – 55% of the transactions are electronic – The Enterprise space is through our processes and experience where we have established partnership with our largest clientsOur scorecard and metrics evolve as our business changes. We continue to evaluate and augment our scorecard to ensure its aligned with Insight’s overall strategic objectives.
- Insight’s success story is how score carding helped us gain funding & investment for our eCommerce efforts Through our success in implementing clients over the years, Insight has recognized the importance of eCommerce and:1. The team has expanded in sizeeCom Sales Ops Team: Insight eCommerce benefit presentations and client supporteCommerce B2B Implementation Team: Client implementation project managementeCommerce Technical team: Technical solution development 2. Executive Sponsorship is solidified3. Financial investments continue to be made
- For those of you who are Buyers and are implementing Ariba internally:Secure the internal investmentRecognize the change management required in such an implementation – it will change the way you do businessEstablish a project timeline and identify stakeholdersFor those of you who are SELLERS and are managing client implementationsEnsure your scorecard is part of the overall scorecard in order to measure your performance for increased investmentDevelop tool-set for implementation management - Establish prioritization criteriaFlexibility is critical – clients will have a variety of requests, establish a way to handle these requests to achieve client satisfaction. In addition, clients schedules will change and priorities will shift, you have to have nimble processes to adapt.