Magento as a crucial part of Digital Transformation in B2B Industry. Case study. Presentation from Meet Magento CZ 2016.

1. Tom Karwatka
Divante.co
Magento as a crucial part of Digital
Transformation in B2B Industry.
#mm16cz

2. This Case Study Shows How We Managed to Reach...
2
100.000.000
EUR online rev

3. B2B is The HoAest eCommerce Field Right Now
• Nearly 75% of B2B buyers say
buying from an e-commerce
site is more convenient that
buying from a sales rep.
• 30% of today’s B2B buyers
finalize at least half of their
purchases online. By 2017, this
will nearly have doubled to
56%.
3
• 60% of B2B companies - their
B2B buyers spend more when
interacRng with mulRple
channels.
• Omnichannel B2B customers
are also more likely to become
repeat and long-term
customers.
hAp://divante.co/blog/b2b-ecommerce-2016/

4. About Client - TIM
• TIM SA is the biggest electro-
technical goods distributor in
Poland and one of the biggest
in the region.
• 30 years of experience in the
market. It’s been on Warsaw
Stock Exchange since 1998.
• Clients from the construcRon
business area.
4

5. Growth Strategy: eCommerce
• Goal: diversificaRon of
business and improvement
of effecRveness
– Expand customer base (new
industries, B2C clients)
– Expand product range and add
new product categories.
5
It is difficult to convince the employees
to introduce new ideas, especially such
radical ones. Moreover, our vision and
strategy need to be clear-cut to the
Board of Directors and owners.
We cannot begin without their support
and - as you can see - the project is
planned to last for many years.
- Artur Piekarczyk, Vice-President

6. Start of
cooperaRon
– 5.2011
Start of first B2C test
project – 9.2011
Niche webshop with
cables for B2C
clients
Can TIM sell on-
line ?
Can we acquire new
customer groups?
Start of B2B
project -
3.2012
Switching to
SCRUM –
5.2013
B2B project
going live –
7.2013
S.W.A.T –
11.2013
Major
redesign –
8.2014
Moving
hosRng from
TIM internal
datacenter
to outside
datacenter –
2. 2015
Advanced
BigData
project –
1.2016
Timeline of CooperaRon
6

7. Process
7
1. Business requirements.
2. Customer research.

8. Research
• Field research.
• We had previously completed a B2C
project, so we had some interesRng
data about a new type of customers.
• Researches we did in this case:
CompeRtors analysis, Surveys,
Benchmarking, Trend analysis,
industry reports etc.
8
In the picture you can see Kasia in one of our end-clients’
faciliRes. During that field research we learned that sales
reps prefer to call their call center and place orders directly
to the operator.
All analyRcs packages provide key reports, such as most frequently
visited pages, visitor demographics, bounce rate and more.

9. Personas
9
• A persona is a ficRonal idenRty.
• Personas help you to understand
what a client actually needs.
• Usually, we create 3-4 personas
for each project.
• A persona gives the customer
data a human face.
• Personas also help prevent some
common design piialls, which
may otherwise be easy to fall
into.

10. Design Phase
• Prototyping – changes are much.
• We use mockups - the interacRve prototypes.
• We get our client involved in almost every phase of design.
10
ConcepRon SelecRon of ideas
Prototype 1
Prototype
3
Prototype
2
GeneraRng
Ideas Coherent
prototype
Workshop Findings
Polishing the
Prototype
Research
Findings
Data
from GA
6 clients
of TIM
2
potenRal
clients
4 iteraRons
of
prototypying
User Research
Design Process

11. We work in teams.
We generate ideas using personas.
Then we do paper prototyping
Ajer that each team presents mockups
and discusses them with other teams.
Then we choose the best ideas and build
one coherent mockup prototype.
Workshops

12. Paper Prototypes
12
Concept 1 Concept 2 Concept 3

13. Digital Prototypes
13
• Digital version of
prototypes.
• Clickable and will allow
us to conduct user tests.

14. User TesRng
• Usually 6 users are enough
to determine 80% of usability
problems.
• We do iteraRve tesRng.
Ajer the tests tweak the
mockups and test everything
again.
14
In this case designing was a challenge: potenRal customers either had an
experience with online stores or had no experience whatsoever.

15. Final Digital Mockup

16. Graphic Design
16
• It took us one month to finish the graphic work.
• To shorten the Rme to market, in the meanRme, we carried on implementaRon.

17. Choosing the Technology
• Since 2008 so we have tried many
eCommerce plaiorms.
• Why you should consider
Magento:
– Magento is currently the most
popular eCommerce sojware
– Magento is the most popular
plaiorm to migrate to
– You have the producer’s support
and an elasRc license model.
– The sojware provides a rich set of
ready-to-use features.
– Magento 2.0!
17 hAp://blog.aheadworks.com/2015/05/ecommerce-plaiorms-popularity-may-2015-two-plaiorms-take-half/
Alexa 1 million top sites survey unveiled leadership of Magento
among world top eCommerce plaiorms.

18. Magento vs B2B Needs
You should consider these points:
• Adding products faster (with photos and videos) - PimCore or Akaneo.
• MarkeRng automaRon that actually works and is easy to use - MauRc.
• RecommendaRon engine - Hadoop.
• Search that works like Google - Fact Finder
• CRM allows your sales reps to work on your clients’ accounts – OroCRM
• Custom B2B modules: a tree structure of the clients' account, payment
methods, flexible shopping cart.
18

19. Omnichannel Open Architecture
19 hAp://divante.co/blog/omnichannel-open-architecture/

20. IntegraRons
Nowadays the plaBorm is connected to the following
systems:
• IntegraDon with CRM system:
– Sending client’s data
– Downloading client’s data
– Cart synchronizaDon (price)
– Cart downloading
– Cart reservaDon
– Sending orders
– Sending RFPs
– Downloading offers for a customer
– Downloading product price
– Downloading product price for a customer
– Downloading invoices data and invoices in pdf
– Downloading order’s history
– Downloading order’s data
• Product Management Program
– Downloading data on products and categories
– Downloading catalogue cards of products and
pictures
• Warehouse IntegraDon
– Downloading product availability
– Downloading cable segments
• FactFinder IntegraDon
– Sending product database
– Downloading search results
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• IntegraRons are one of the hardest problems in eCommerce development.
• CreaRng failbacks - if one of the systems is down we are able to operate - sRll
• We use a dedicated sojware as a buffer layer.

21. CRM Live IntegraRon
• CRM integraRon plays the key role in the system
• Bilateral integraRon in a real Rme - the merchants in TIM’s central can edit
the shopping carts of the customers that are currently logged on.
21
Reco engine Browsing
Call
Add to cart
Client Consultant

22. Users Inspire Us
• One day a consultants finds
an order for 100 light bulbs and
a huge electric pole.
• To ship such a pole, you have
to carefully arrange the delivery.
22

23. Dedicated FuncRons
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Dynamic offer
You want to buy 2 km of the cable.
TIM has a 2.5-km-long piece in stock, they’d love
to get rid of. So, they offer you their 2.5 km
cheaper than your 2 km. It’s up to you to decide
which length you will opt for.
The online cart is expanded.
You have a bunch of specific
funcRons, like communicaRon with
the merchant, dedicated payment
methods, converRng cart to an offer
inquiry and so on.

24. B2B FuncRons to Consider
The most common B2B funcRons we implement in our projects:
ü List of contractors with verificaRon
ü Individual or collecRve negoRaRon of discounts
ü Order files
ü Offer creaRon
ü Consultants who can accept the order on behalf of the customer by the
phone / email / during a meeRng
ü Saving and sharing the cart content
ü Forms of payments that are typical of B2B (for instance: a trade credit)
In the cases like this one, all the dedicated funcRons are implemented as extra
Magento modules. So you are sRll able to update your Magento.
24

25. Development phase
q Scalability and Performance
q Quality
q SLA
q EffecRve development
q Data Driven Customer Experience
ImplementaRon and Start-up
The implementaRon of the first
version of the system took us over
14 months.
25
Start of
cooperaRon
– 5.2011
Start of first
B2C test
project –
9.2011
Start of B2B
project -
3.2012
Switching to
SCRUM –
5.2013
B2B project
going live –
7.2013
S.W.A.T –
11.2013
Major
redesign –
8.2014
Moving
hosRng from
TIM internal
datacenter
to outside
datacenter –
2. 2015
Advanced
BigData
project –
1.2016

26. Scalability and Performance
• ReplicaRon of the database to speed
up reading operaRon and balance the
traffic to database
• Using a cache system – in this case
Memcached was replaced by Redis
• Using a scaAered file system
(GlusterFS)
• Using an hAp-reverse-proxy system
Varnish that speeds up loading pages
and staRc files
• Using PerconaDB instead of MySQL for
the database
26
New Relic Performance Report, ELK Stack + Kibana

27. Ensuring Quality
• The extra risk factor: a big number of
integraRons.
• Ajer every round of changes, we do the
performance test to verify that the
applicaRon works beAer.
• To keep the quality high, we use
– 2 phase Code Review
– version control system,
– RckeRng system (where all communicaRon with
the client happens)
– monitoring system – Incinga, Jenkins + Selenium
+ ELK Stack to monitor integraRons
27
We use separate environments for developers, tests,
and producRon.

28. SLA
• 250.000 EURO daily rev.
• We must be able to react under 1 hour and
prepare a workaround for any problem.
• “Divante S.W.A.T.” – a specially formed unit
working 24/7.
• The membership is opRonal but to sign up
every member has to pass an official exam.
• Members get special bonuses added to
monthly salary.
• The group responsibility - if SLA is violated
on any website, nobody gets their bonus.
28
Divante S.W.A.T. is a unit, that covers
security of the plaiorm and react ASAP
when the system is down or an
emergency happens.
SLA > 99.9%

29. EffecRve Development
• To maintain effecRve
development of project
we created a dedicated
team
• SCRUM gives TIM the
control and quality they
need.
• SCRUM team
– Product Owner
– 4 Developers
– 1 Front End Developer
– 1 Tester
• ConRnuous delivery -
Ansible, Phing
29
Source: hAps://en.wikipedia.org/wiki/ConRnuous_delivery
To ensure conRnuous delivery we automate the tests and deployment.
Deployment time <5 min

30. Data Driven Customer Experience
We use data on a large scale to
improve User Experience for
TIM’s clients.
To inspire you - on TIM’s
examaple:
• 97% of customers preffer one
specific view of product list –
„miniatures”

31. Business Results
31
The share of online sales
in total sales in terms of income
The share of online sales in total
sales in terms of No. of products
The number of the products ordered online is growing faster than the total
value of online sales. That means that the online sales have bigger
potenRal to diversify. On top of that, smaller but more frequent purchases
build customer loyalty.
B2B project
going live –
7.2013
Q3, 2015
• Ajer the first year:
– 50% of online sales
– Over 50.000.000 EUR
online rev
– 25.000 products
• Ajer 3 years – Q1-Q3
– 67% of online sales
(85% of products)
– Over 100.000.000 EUR
online rev
– 125.000 products

32. Business Results
• This project has been
a huge success for TIM.
• They achieved their business
goals:
– Diversity of business
– A lot of new customers
– Improved business effecRveness
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Clients tesRmonials: hAps://www.youtube.com/watch?v=-
QumO63G_7M&list=PLuXGEsfZdwIUuaIJTEd3PDSUQLilYVu9a&index=3
TIM client’s really like the B2B e-Commerce website
Harvard Business Review has wriAen an arRcle about TIM recently.
The Project was shown as a true digital transformaRon.

33. What’s Next?
• Improving the retenRon of clients
through BigData analysis and
personalized recommendaRons.
• Automated pricing opRmizaRon
- the next big thing we want to pursue.
33
In the Forrester research from 2014 - Building The B2B
OmniChannel Commerce Plaiorm Of The Future
• Automated pricing opRmizaRon – 62%
• Personalized recommendaRons – 56%
• Use of wearable compuRng in distribuRon
centers – 49%
• Sensors in shipments/products – 46%
• Robots/automaRon in distribuRon center/
supply chain – 34%
• Shopping cart abandoment analysis – 32%
B2B e-Commerce technologies
to invest

34. Thank You!
Tom Karwatka
Divante.co
hi@divante.co
3
We base on the experRse we’ve got from a number of B2B projects
and generalize it to find the gold rules of B2B eCommerce.