The 2014 planning and budget season is upon us; and if you are like the numerous B2B and EDI managers I speak with on a regular basis, this is a battle that is hard fought and often results with less than you need to keep up and keep your company competitive. With a few data points, a report I helped develop a few years back, and your “tin cup” in hand, you can make a compelling case for how you and your team can significantly cut costs and improve the performance of your organization. Use this approach to get budget support from your line of business partners.
Your B2B team is likely taking a backseat to “higher priority” or “sexier” IT projects like BYOD, mobile, social, or cloud. Or the past list of usual suspects like; enterprise resource planning (ERP) implementations, application integration projects, and service oriented architecture (SOA) upgrades. Even worse, your company likely doesn’t understand the value of what your team provides or can provide resulting in a focus on only those partners that mandate electronic commerce or those “high value” partners that are capable of trading electronically ignoring the costly manually partners. Does any of this sound familiar?
If you answered yes, then it is clear that you have an opportunity to articulate the savings your team is currently creating as well as the potential savings you can create for the business by automating more of your manual (phone, fax, e-mail, postal mail) partners. As you know, like any other business request that requires incremental investment, it takes sound justification that proves positive return on investment . With this info, you can “tin cup” outside of the IT budget to gain support for those that hold more of the money... That’s right the LOB organizations.
So where do you start?
- Option one: Pour through volumes of analyst research and reach out to all of your industry peers to determine best practices for calculating manual costs and expected returns on investment from automation. But surely someone has already done that, right? Well, that is option two, and precisely what I did for a few years back before IBM purchased Sterling Commerce.
- Option two: In less than five minutes the B2B Automation Savings Calculator enables you to generate an eight-page PDF report of what your company is currently spending on manual processing (using your costs or our industry median costs) and potential savings that your team can create by automating more of these manual business transactions. It also includes analyst justification of the benefits achieved with automation from three leading B2B analyst firms, AMR Research (now part of Gartner), Forrester Research, and Aberdeen Group. While the calculator is not intended to be a complex ROI tool, it does calculate conservative cost savings estimates, based on independent research performed by Forrester Consulting on behalf of Sterling Commerce, for automating the processing of typical business documents such as purchase orders, invoices, advanced shipping notices (ASNs) and payment remittances.
Show ‘future value’ and (with a few tricks) ‘current value’
The tool was designed to justify the “future value” of your B2B operations by automating those partners currently trading manually and therefore the calculator’s three-step process for doing so is straight forward and clearly articulated within the tool. However, in a recent conversation with a customer, we learned how he used the calculator to justify the “current value” his team is generating through electronic trading.
To achieve the “current value” calculations, the EDI manager modified the responses to the following inputs:
- How many total trading partners do you have?
- What percentage of those are you still trading with manually?
Instead of using an aggregate number for the first question, he used the number of customers currently automated. And for the second question, instead of a fractional percentage, he answered 100 percent.
By changing these inputs, the calculator is now calculating the manual processing costs that the company would face if these partners were not automated. With these modified inputs, the industry median cost values -- and a conservative estimate of a 20-50 percent savings from automation -- he was able to show that his team is currently saving the company tens of millions of dollars annually through B2B process automation.
So what’s the point? The point is to show that B2B departments are still very much a strategic asset to the business. In fact, many customers I speak with tell me how they have converted their information technology (IT) departments from being just a tactical group that takes direction from the business owners, to a competitive differentiator that regularly partners with its line-of-business owners to drive more profit to the bottom line.
The partners you are managing and the documents flowing through your infrastructure are critical to the business today. Once you have the numbers showing how much you are saving the company today, run another report focusing on what you could save your purchasing department if you automated more purchase orders, or your accounts payable/receivable departments if you automated more invoices and remittances. The technology is available today to on-board the manual partners with little or no management and effort on your part, but I will save that for the next issue when we talk about segmenting your partners for greater B2B automation success.
Access the B2B Automation Savings Calculator and Start Proving Your Value Today
For more information on the calculator, see my prior blog posting from April, "Manual B2B Transactions, What are they Costing You?