pixeltrap - Fotolia
Through digital transformation, companies are finding new ways of thinking about their business models.
Take Mitsubishi Imaging, for example. The Rye, N.Y.-based firm that distributes paper products to a North American market from its manufacturer in Japan found a way to connect with customers directly by implementing an e-commerce B2C and B2B project. The key to the project is e-commerce software from Sana that integrates an e-commerce B2C web-based front end with Mitsubishi Imaging's Microsoft Dynamics NAV (formerly Navision) ERP back end.
As a result, customers can order directly form the company and see inventory and ordering information in real time, while Mitsubishi Imaging's customer service reps can focus on solving problems rather than merely doing order entry, according to Doug Lombardozzi, Mitsubishi Imaging's senior director of information systems.
Changing a traditional system
Mitsubishi Imaging had a fairly traditional sales model and organization, but Lombardozzi said it was time to rethink this approach.
"We were a little slow in starting to think about e-commerce here, but we finally realized that we needed to become more streamlined and more efficient," Lombardozzi said. "We also needed to become more customer-focused and provide more customer service and not so much order entry."
The company has been using Microsoft Dynamics NAV for about 15 years (beginning when it was still Navision), and the system manages all customer data, inventory, pricing and more. A customer service group took orders by phone, email and fax and entered them into the Dynamics NAV system manually.
"We were trying to update that whole process and move it out to let customers place orders themselves and let them get the access to look up other information online," Lombardozzi explained. "Historically, that hasn't been the culture of our customer base, but things have changed, and we wanted to move along with that."
By allowing customers to place orders via an e-commerce B2C or B2B system, Mitsubishi Imaging's customer service reps could increase their knowledge and be able to work more with customers rather than spending all their time entering orders.
This led Lombardozzi to Sana Commerce, a Rotterdam, Netherlands-based firm that provides e-commerce B2C and B2B software that specifically integrates with Microsoft Dynamics and SAP ERP systems. This allows companies to build web front-end stores that connect directly to the ERP data.
Real-time data is the difference maker for e-commerce
The Sana e-commerce platform was designed from scratch to integrate with ERP systems, which is beneficial for companies in running their web stores, according to Chris de Visser, general manager for North America at Sana Commerce.
Retrieving data in real time from the ERP system makes a tremendous difference in how companies can run a B2C web store or B2B online business, de Visser said, because they can deal with more complex interactions than e-commerce platforms that run alongside ERP systems and deal with more static data.
"It gets more complex as soon as you start having differentiations per customer, such as one customer cannot buy a certain product," de Visser said. "As soon as it becomes somewhat custom business logic, it becomes very complicated to move that in web store platforms that are not designed for ERP integration. The ERP systems offer all that functionality, and companies are used to that from their internal systems, so they have to keep modifying the web system to do that as well."
This direct ERP integration was the most attractive aspect of Sana for Mitsubishi Imaging, Lombardozzi said, as well as the fact that it's a new state-of-the-art technology rather than one that was grafted onto another platform.
"They came out and built on a .NET environment with everything new as web services, plus they had a mobile app version ready to go," he said. "Integrating into Navision itself was seamless and pretty efficient. They communicate through web services and just exchange XML documents, which is nice because each side can develop in their own world and all you have to do is pass the documents back and forth. It's pretty straightforward."
Sana is a cloud SaaS application and is easy to use right out the box, Lombardozzi noted, but it's the real-time integration with the ERP data that drives the value of e-commerce. There's also flexibility in allowing what customers can see when they access the e-commerce site.
"It can show if products are available, or the quantities of the products available, or not show that info at all," Lombardozzi said. "For the dealer side, we found that it was good for us to have them know what we have on hand and what we don't have on hand, and it's very real time, so if we sell something and that gets taken out of inventory and you look at the website, it's going to show up there immediately."
Business process changes more challenging than technology
The e-commerce project has taken Mitsubishi Imaging about two years to complete, but Lombardozzi said that the technical issues were the easiest to overcome. It was much tougher to work out new business processes that e-commerce requires for both B2B and B2C and to deal with change management. It took only a few months for Mitsubishi Imaging to build the initial e-commerce sites that were able to take orders, but then, the company realized that there would need to be some changes in processes.
"We had all these processes in place in the way we do things, and they had to change because now the customer's going to do the ordering, and that's what took a long time," Lombardozzi said. "It was really tough to turn the ship around, so if I had a chance to do it again, I might think differently about it and get management and everyone to really see that it's not the technology, but it's changing the ways that we've done everything since the time the company started."
Changes in the business model also had to be considered. For example, Mitsubishi Imaging sells most of its products through a dealer network, which is now altered because of the e-commerce B2C web store.
"We had to figure out strategically how to sell things and not interfere with our sales to the dealers," Lombardozzi explained. "We sell to dealers, but if you want to get printer paper, for example, you can now come to our site, so we are in a sense competing with them directly."
The Mitsubishi Imaging B2C e-commerce site is due to go live in January 2018, and Lombardozzi is looking forward to having a "cleaner and leaner" environment for the company and a better sales experience for customers.
"The fact that we are committed to this forced us to look at all these things that we didn't want to look at before and say, 'That's not an automated process, that needs to change,' or, 'There's something special for that customer, that needs to change,'" Lombardozzi said. "[On the business side], it's about automation and efficiency, and on the other side, it's giving customers more self-service, historical account visibility -- things that everyone's taking for granted these days and you are just expected to be able to do."