Going Touchless to Create a Superior Customer E-Commerce Experience
As an Ariba seller, you know that using e-commerce is a great way to grow revenue, cut costs, improve customer service, and maximize your competitive advantage.
Yet the vast majority of sellers capture only a fraction of the value they could realize through e-commerce. Why? Because once they’ve added a few electronic capabilities, such as receiving online orders or sending e-invoices, they stop—rather than continuing their e-commerce journey by integrating with their customers.
Integration (also known as direct connectivity or touchless processing) enables you to fully automate the entire order-to-cash cycle, providing straight-through electronic transacting that maximizes benefits for you and your customers. And Ariba’s updated subscriptions offer powerful new resources to make integrating through the Ariba Network simpler and more cost-effective than ever before.
Integrating through Ariba: What’s In It for You?
Integration offers dramatic efficiency gains and savings over paper or basic electronic methods, allowing you to achieve gains such as:
- Faster payment and lower DSO. By establishing systematic, repeatable electronic processes that eradicate the need for most manual handling of orders and invoices, integration significantly accelerates the order-to-cash cycle—shortening your time to payment and reducing days sales outstanding (DSO) by an average of 22 days.
- Higher customer satisfaction, retention, and sales. Faster, more accurate order processing combined with an Amazon.com-like user experience drives major improvements in customer satisfaction, increasing customer retention as much as 48 percent and boosting existing account revenue close to 40 percent.
- 75 percent lower order and invoice processing costs. Integration improves your operating efficiency and lowers your cost of doing business, which in turn enables you to make your products and services more price competitive.
- Greater accuracy. By eliminating rekeying of documents and the need for human intervention, integration reduces error rates by 50 percent or more over paper-driven methods.
Staples: End-to-End Online Commerce Creates a Superior Shopping Experience and Reduces Service Calls 40 Percent
“The Ariba Network is a dependable platform that gives Staples flexibility to meet our customer requirements and allows us to continue to make the customer experience easy.”
Denis Kudriashov, Senior Manager, eProcurement, Staples
Check out this brief case study to see how integration has helped Staples drive impressive improvements in service and savings.
What Is Integration?
Sure, benefits like these sound good. But what exactly is integration, and how does it deliver such exceptional results?
The answer can be summed up in one little word: “touchless.” Integration is two-way, machine-to-machine communication that fully automates transactions between you and your customers. It connects your back-end system directly to the Ariba Network, providing a systematic and efficient way for your and your customers’ systems to interact without requiring a person to log in or handle processes manually. And once integration is set up, transactions can be truly touchless—orders automatically arrive in your order management system with the correct information and are processed, and accurate invoices are automatically generated in accordance with your business rules—so you only need to manage the occasional exceptions that may arise.
To understand integration, it’s helpful to think of e-commerce as progressing along a spectrum. At each step along the way, you gain additional benefits; integration represents the highest degree of automation and delivers by far the greatest value.
So initially you might simply transmit orders and invoices via email, which is one step above a paper-based process. At the next stage, you begin to automate portions of the order-to-cash process—for example, by logging into a portal such as your Ariba account to receive orders, and using PO-Flip™ or CSV upload to create invoices electronically. While resources like these increase your e-commerce rewards, they still require some manual
intervention, allowing errors to creep in and absorbing time and money to complete basic, repeatable processes that could be automated. With the straight-through electronic transacting delivered by integration, however, you eliminate these problems—moving your collaborative business commerce capabilities to a whole new level that maximizes the speed, efficiency, and accuracy of all your order-to-cash processes.
The chart below illustrates the increasing value you can gain by moving towards total automation.
Benefits vs. Costs: When Should You Integrate?
Integration can clearly drive unparalleled value for you and your customers, but it doesn’t make sense for every relationship. Though there are no hard-and-fast rules, considering where you stand in the following three areas can help you determine when and if you should integrate.
- Your transaction volume. As your number of PO and invoice transactions increases, the value of fully automating these processes escalates as well. If you conduct 1,000 or more transactions annually with any customer, you’ve reached the point where integration can deliver significant ROI. In some instances, even 500 transactions make it worthwhile, especially for more technologically sophisticated sellers whose business practices dictate earlier integration.
- Your current infrastructure. Several key infrastructure components are necessary to effectively support the integration process, so you’ll want to have these in place before getting started (note that Ariba can provide guidance in helping you develop the resources you’ll need, or connect you with third-party providers to create them for you):
- A back-end ERP, order management, and/or accounting system such as QuickBooks, Sage, Great Plains, or any of the other widely available solutions that can generate the necessary files to be translated to cXML.
- An enterprise application integration (EAI) or middleware tool such as webMethods or BizTalk to help you conduct document transformation and create the native cXML required. Depending on the protocol you plan to use, having experience with EDI or XML and/or a connection to a value-added network (VAN), AS2, or similar resource is also valuable, since you can leverage that knowledge and infrastructure for integration through Ariba.
- Your IT capabilities. While requirements differ depending on customer parameters, your existing infrastructure,and other variables, you’ll need to provide some degree of IT resources to manage the steps involved in integration. For example, if you’ve worked with EDI or XML in the past and already have the key infrastructure requirements set up, you should expect to devote about half an FTE for a period of 8 to 10 weeks to complete document mapping and other integration tasks. Basic understanding of supply chain document choreography as well as the ability to supply or match specifications needed to support the connection are crucial as well.
Integration Made Easy through New Ariba Subscriptions
As part of its ongoing commitment to help sellers gain the highest possible benefits from collaborative e-commerce, Ariba now offers comprehensive
integration services for both EDI and cXML through the Supplier Membership Program (SMP). Sellers at the Enterprise and Enterprise Plus subscription levels can take advantage of an Ariba Integration Connector, powered by Dell Boomi6, to streamline the integration process and reduce the effort and expense of data delivery and transformation. In addition to the live training demos and unlimited CIF and Ariba PunchOut™ catalog access given to all Ariba sellers, introductory data cleansing and enrichment services are also provided at these subscription levels, ensuring that the completeness and quality of your catalog information meet the standards required for successful integration. The Ariba Commerce Assistance team can help you get started, and the Ariba Supplier Integration team will work with you to complete the actual integration process.
Sellers at lower subscription levels who wish to gain access to these valuable new integration tools can do so through an optional upgrade process. To learn more, log into your Ariba Network account and click on “Service Subscriptions.”
1Aberdeen Research, “Contract Management: Quote-to-Cash Cycle,” 2006; Aberdeen Research, “Contract Lifecycle Management Collaboration,” 2008.
2Forrester Research, “Analyst Inquiry,” 2012.
3Selling Power, “The Tech Trends for B2B Sales Today,” July/August 2011.
4Aberdeen Research, “The Order-to-Cash Cycle,” 2008; AMR Research, “Benchmarking B2B E-Business: The Value Is In There,” 2007; and The Hackett Group, “Five Strategies for Maximizing Customer Adoption of Electronic Invoice Presentment and Payment,” 2012, all suggest DSO improvement by 6-13 days.
5When using electronic purchasing data in your business intelligence processes: Aberdeen Research, “Operational Intelligence: Boosting Performance with ‘Right-Time’ Business
Customer Support for more details.
This article 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