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As you evolve along the e-commerce maturity curve—moving from reactive mode, where you mainly respond to customer requests, to proactive, where you initiate actions that optimize your e-commerce capabilities to increase value for you and your customers—it’s important to put measurements in place to track progress and document success. And an e-commerce scorecard is a great tool to help you do it.

 

How can an e-commerce scorecard benefit your business?

An e-commerce scorecard gives you a highly effective way to share key metrics that reveal the success of your e-commerce strategy. Why is this important?

  • Enhances buy-in and support at all levels of the organization. When you share measurements, you increase visibility and appreciation for the value of e-commerce at all management levels—including the executive level. For example, hard numbers demonstrating how much of your company’s revenue comes through e-commerce can make management take serious notice. Similarly, when you can show how much money you’re saving on every electronic order that comes in unassisted (like the cost of 10-20 minutes of sales agent time per order) and how much faster you’re getting paid (by five to 15 days or more), executives can better understand the extraordinary potential of e-commerce to lower sales costs and reduce days sales outstanding.
  • Hones your strategy to drive better results. Besides making it easier to socialize your initiatives internally, publishing a clear set of measurements helps you and your team focus on what you really want to accomplish. With the right scorecard metrics, for example, you can see where you need to improve to achieve your goals and meet—or exceed—service levels provided by your competitors. And based on this data, you can make rational decisions about where to invest further. Measurements can also be the key to securing new budget for e-commerce initiatives; the more executives see tangible proof of the value of e-commerce, the easier it is to get funding for e-commerce improvements to grow your team, enhance your e-commerce capabilities, and move further up the maturity curve.
  • Helps you benchmark and improve your market position. Measurements help you objectively assess how competitive your business is relative to other suppliers. For example, you can evaluate whether your services are at least on a par with best-in-class suppliers, and identify and promote specific areas where your performance and capabilities differentiate you from other sellers—which can be critical to finding and keeping customers and driving up sales.

 

Tomorrow: Getting started strategies

If you don't want to wait, go to our Supply Lines group to read the full article.

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Yesterday, we posted a blog that had tips on working with Sourcing Managers.  Today, we'll discuss the last two tips.

 

Tip #7: Don’t take your customer for granted once you finalize the contract. Too many sellers view a signed contract as the end point of their efforts. Yet getting the business is only the first step; keeping it is something else again. Cement relationships by watching for new opportunities to help the customer cut costs, work more efficiently, and make their life easier. If you don’t, you may lose their trust and ultimately, their business. “If a competitor points out ways my current supplier could be saving me money or bringing value-add that they didn’t tell me about, I may bid out that business and award it to someone else, whereas if my current seller had brought it to me up front I’d stick with them,” Sherrill says. “For example, if you’re providing e-catalogs for other customers, or using EDI or pCards or things like that, you should proactively say to us, ‘Do you want to use EDI? Because we can do it; please set us up.’ That’s always better than us having to reach out to you.”

 

Tip #8: Do follow good financial practices. For example:

  • Don’t invoice without a purchase order. Though the best practice is not to render service till you’ve gotten a PO, internal users will often ask you to move forward while promising to get the PO in the system. While that may be okay to a certain point, be sure to get a PO before sending your bill. “Invoices that don’t reference a PO delay the payment process and cause other match exception problems,” Sherrill says. “Instead, they need to insist that the end user gets the PO to them so they can reference it in the invoice.”
  • Know the buyer’s back-end AP processes and automate when possible. Dealing with the myriad ways sellers want to submit invoices creates headaches for buying organizations, so make it your priority to learn and use their preferred method. If e-invoicing is an option, be sure to offer it, since it saves you and your customer effort and expense and greatly increases accuracy.
  • Manage your cash flow effectively. Do whatever it takes to ensure that your bills are paid in a timely fashion and your other cash flow needs are met. “We’ve had suppliers come into our office and wait for AP to print off their check so they could pay their subcontractors and prevent legal action being taken against them,” Sherrill says. “That doesn’t look good.” Resources like Ariba Receivables Financing and dynamic discounting can help you get the money you need when you need it.

 

This post is part of the current issue of Ariba Supply Lines. Ariba Supply Lines is a quarterly newsletter that provides valuable tips, best practices, and the latest thinking to take your online business relationships with your buying customers to the next level.

To subscribe to this permission only newsletter, please click here.

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Yesterday, we covered the benefits of contract management. Today, we'll share best practices for implementing an automated solution.

 

1. Build a template that’s easy for users to adopt. By designing a wizard-style template to guide various users along a customized path, you can ensure they see only the appropriate tasks, documents, and approval workflows. And to make sure the flow you create will really work, you first need to “know what your process is and get it down on paper,” Martz says. Answer these questions:


  • Who’s asking for the contract?
  • Who will use the system, and what will their roles be?
  • What dollar thresholds
  • Who needs to see which documents, and when

 

You can also gather metrics on how long tasks actually take and use this identify bottlenecks if the process isn’t moving quickly enough, providing a good timeline for your contracts overall.

 

2. Promote contract visibility throughout your company. “Make sure all stakeholders, not just those in sales, really understand the implications of sales contracts,” Dwyer advises. Role-based access along with dashboard self-service search and reporting tools give users the visibility and resources to use CLM effectively.

 

3. Manage risk at the contract and engagement levels. It’s essential to track and understand what’s going on within all contracts—not just some of them, or only those in your own department. You can establish an alert system to help users monitor status and ensure you don’t miss deadlines, fail to fulfill terms and conditions, or overlook legal mandates. For example, automating physician contracts makes it much easier for the Cleveland Clinic to stay compliant not only with internal policies, but state and federal requirements as well, despite rapid growth and a sharp increase in the complexity of healthcare regulations.

 

4. Move from tactical to strategic contract management. “Don’t think of this as just another series of processes that unfortunately you have to do day in and day out,” Dwyer says. “Think about it as more strategic: ‘Hey, if we do this the right way, there’s going to be tremendous value across the organization.’” For example, you can take advantage of the centralized contracts repository and data analytics to inform your negotiations on upcoming contracts. “It’s always interesting to be able to dig into that information and say ‘We signed this contract with this organization four years ago, what were the negotiations like last time, or what was the pricing like last time?’ All that information is very important,” Dwyer says.


 

Learn more

For more information about how automated contract management can deliver value to your business, listen to the full session on the Ariba Slideshare site. To learn about the Ariba Contract Management solution for sales contracts, go to this web page and download this datasheet.


To read the article in full, click here. For latest insights and best practices for collaborative business commerce, go to our Supply Lines group.

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Yesterday, we introduced the importance of contract management. Today, let's talk about specific benefits.

 

How can automated contract management benefit your business?

Sure, faster negotiation and lower risk sound good, but is sales contract automation really worth the effort and cost? As Dwyer and Carol Martz from the legal department of the Cleveland Clinic made clear in a presentation at Ariba LIVE 2014, the answer is a definite yes. Benefits of automating include:


  • Up to 10% higher revenue. While contract compliance issues typically cause sales leakage of 2-3%, automated CLM drives compliance up, protecting that revenue for your business. It can also increase revenues 5-7% through 50% faster negotiation cycle times, 15% higher renewal rates, and improved collaboration during and after contract execution.[ii]
  • Greater visibility. A paper-based process makes it difficult to access the information in contracts, limiting you "not just in terms of visibility or data, but true sales intelligence,: Dwyer says. With comprehensive data analytics and reporting from automated CLM, you can mine valuable contract information and use it strategically.
  • A faster, more efficient CLM cycle. Automated CLM gives you enterprise-wide management capabilities so you can centralize and standardize all sales contract functions, get approvals faster, and use limited legal resources more accurately.
  • Better customer relationship management (CRM). Automated CLM supports direct collaboration with customers and tells you exactly where you are at every stage in the process, and can also be integrated with your existing CRM program and/or software. The ability to easily track dates and milestones, ensure that negotiation specifics are actually in your contract, stay on top of deliverables, and fulfill agreed-on requirements strengthens satisfaction and sales.

 

Tomorrow: Best Practices

If you don't want to wait, go to our Supply Lines group to read the full article.

 

 



[ii] Source: International Association of Contracting and Commercial Management (IACCM

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Yesterday, we discussed how social media can help turn chaos into order. Today, we'll share how you can continue to maximize social media ROI.

 

Monitoring tools: a marketer’s best friend

 

  • Capture key customer input for process improvement. Social media and online communities provide a vast new arena for connecting with customers, and listening tools let you mine this resource for valuable information and feedback—which you can then use to streamline value chain processes. Socially savvy companies do exactly that, plugging in social media data to improve their performance in areas like customer service, demand management, product design, operations planning, inventory management, and more. And the results are nothing to sneeze at. For example, businesses that use dedicated social media monitoring are realizing:

 

    • Greater customer satisfaction, with users achieving an 84.4 percent rate vs. 82.9 percent for non-users
    • Faster order fulfillment, with users realizing 94.4 percent on-time fulfillment compared to 91.6 percent for non-users
    • Higher average order value, with users showing a .6 percent advantage over non-users
    • Better customer retention, with users at a rate 6.4 percent higher than non-users
    • Enhanced gross margin return on inventory investment (GMROII), with users realizing 11.7 percent and non-users 8.6 percent
    • Lower online cart abandonment, with users experiencing a 6.8 percent lower rate than non-users[iv]

 

Numbers like these paint a clear picture of how social media monitoring can help you understand, integrate, and deliver what customers really want—boosting not only your brand image, but your top and bottom lines as well.

 

 

 

 

[iv] Aberdeen Group, March 2013

Source: “Understanding the Real Impact of Social Media Monitoring on the Value Chain,” Analyst Insight, Aberdeen Group, March 2013

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