Supply LinesdadsVolume 25 - 2012  • Subscribe

 

 

Sure, you hear a lot about how e-commerce can help you collaborate more effectively with your customers. But what does that really mean—and how will it help you meet your business goals? Even more important, what steps and best practices can you follow to optimize your results?

 

These questions were the focus of a recent Ariba webcast in which Oozy Adziashvili, lead account manager of corporate sales at B&H Photo, joined Toni McGovern, e-procurement manager at Johnson & Johnson, to discuss how they’ve used collaborative e-commerce and online catalogs to drive highly successful—and mutually beneficial—business relationships.

 

The Collaborative E-Commerce Payoff

So what kind of benefits can you expect from collaborative e-commerce? For B&H, the results have been truly transformative, allowing the company to realize over 500 percent growth in one of its largest customer accounts and evolve from straight brick-and-mortar sales to true e-commerce innovation, with more than $50,000 of online sales daily. Johnson & Johnson has realized major process efficiencies and cost savings, made procurement fast and easy for employees, and built valuable strategic relationships with key sellers. Below are six best practices you can use to achieve similar gains.

 

  1. Build e-commerce expertise as a competitive differentiator. More and more buying organizations today are seeking sellers with e-commerce capabilities. “We have tens of thousands of suppliers throughout the world, but we choose to go into negotiated contracted relationships with only a small portion of those,” Toni notes. “We look for suppliers that are sophisticated in their e-commerce functioning and share our vision of having an end-to-end electronic process. And if they’ve already managed a catalog through Ariba Buyer™, they move right to the top of our list.”
  2. Pursue full integration for a completely touchless process. By providing a common platform to connect your market-to-cash processes with your customers’ source-to-settle ones, e-commerce integration drives the end-to-end efficiency, visibility, and accuracy you both want. It also streamlines collaboration so you can work together to find common ground—and develop win-win solutions that help each of you succeed.
  3. Implement online catalogs, especially PunchOut. Though CIF catalogs can be useful if you only sell a small number of static products with infrequent price changes, PunchOut delivers multiple advantages. For example, moving to a PunchOut catalog with Johnson & Johnson enabled B&H to grow the account while saving Johnson & Johnson thousands of dollars. PunchOut enables you to:
    • Make line-item and price updates quickly and easily. Rather than having to manually upload changes for each catalog, PunchOut lets you handle adjustments in one place—your website. “The best thing with PunchOut is that it offers accurate pricing,” Oozy says. “We’re able to update our website multiple times daily, and we don’t have to worry if we get audited by the customer, because our pricing is always in compliance with their contract.”
    • Improve customer service. Switching one of its largest customers from a CIF catalog to PunchOut enabled B&H to serve them better. “PunchOut allowed us to respond considerably faster and get orders out the same day, and it allowed our accounting teams to service our customer’s other needs,” Oozy says. “And if there was ever a problem, they could solve it much more expediently.” Customers also appreciate the enhanced ease of use PunchOut delivers. “We love suppliers who can provide us PunchOut functionality, because it makes the end-user experience very high-tech and very familiar,” Toni says.
    • Sell even complex services and products. Customers can specify and select a wide range of product and service parameters through PunchOut. For example, Johnson & Johnson uses it to procure temporary services and configurable items like office furniture.
    • Drive visibility and business growth. “Ariba’s PunchOut solutions have allowed us to simplify purchasing and gain greater visibility in our customers’ organizations, which helps us capture additional share in their accounts,” Oozy says. B&H has made more than 50 connections through Ariba in the four years since it implemented PunchOut. “We’ve seen over $10 million in annual transactions and tremendous growth, and it allows us to offer the entire range of products that we sell,” Oozy notes.
  4. Use e-commerce to serve customers with a full line of products. “When we pick up a brand, we get the entire line of accessories to that brand—we don’t just sell an item and not carry the accessories, because then customers would have to look for those through other sourcing means,” Oozy says. PunchOut can automatically suggest related items for purchase, saving customers time and increasing your sales. “They get everything from one source, they get it according to their pricing, and they get it fast.”
  5. Teach customers money-saving best practices. As your e-commerce expertise grows, look for ways to share that knowledge with customers. “You’re going to need to help end-users understand the value and efficiencies you’re bringing to them,” Toni says. By doing so, you increase your credibility as a true business partner who can support their e-procurement initiatives while easing the change management process. For example, B&H helps customers identify off-contract spend and shows them how to use e-commerce to make those purchases compliant. They also demonstrate the savings customers gain from sourcing all their technology needs from a single, contracted relationship, which in turn helps them capture a higher share of sales.
  6. Take advantage of Ariba resources. Ariba offers a host of solutions and services to help you collaborate more effectively with customers and use online catalogs to build your business. To learn more, contact programs_info@ariba.com.