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Monday, November 12, 2007

"Both Parties Must Both Gain Benefits" is the First Golden Rule

You may recall that in "Beware the "cheap" option!" we looked at some of the wasteful abuses that can be imposed on you if a "website" substitute for business-to-business, integrated EDI is presented to you as the means to provide your customer with electronic documents, such as invoices, despatch and remittance advices. The "cheap" option only leads to your staff having to double type all the information from the documents into your systems and into the “website”!

  • Your work is doubled.
  • Your risks from human error are doubled.
  • Your costs go up.
  • Your profits fall.
  • Your prices need to go up...
  • You become less competitive!


What can you do to avoid such abuses?


Well, the remedy is a bit like growing asparagus...


Asparagus?


Yes. To grow asparagus you dig a hole three meters long by three meters wide about one meter deep. You fill it with all sorts of good stuff from stables mixed with exquisite soil and you plant the asparagus – FIVE YEARS AGO!


You must avoid being pushed around by the eBusiness team. They are working to a very restricted agenda. They know nothing and care less about your business value to their employer. You need to maintain and cultivate your highest levels of contact within your customer. You need your relationship to be strong enough for your senior contact to be prepared to instruct the eBusiness team to co-operate with you. To make an exception in your case. You will still be a very willing eBusiness partner, but the job is going to be done properly and, to a certain extent, on your terms!


It is best if you avoid direct contact with the eBusiness team. Let your eBusiness provider do that whilst you maintain your good standing with your senior contact(s)!


What then do you offer to do for your ally in the senior echelons of your customer?


When the “website” was implemented it was configured to receive orders from your customer's purchasing systems. These orders are passed to the “website” in electronic form. They are files and they have a format. All that has to be done is for you to be supplied with this format and for your customer to agree to sending the order files to your eBusiness system by one of the accepted transport methods.


Similarly, the “website” passes the documents (such as invoices, despatch advices and remittance advices) that are inbound for the customer's systems as files and they too have formats. If the formats are made known to you and your eBusiness provider then they too can be passed directly to the customer's systems just as efficiently as the files that are currently passed to them from the “website”.


The benefits here are that you avoid doing the work twice.


All the risks listed above are eliminated.


You have reinstated the first GOLDEN RULE:


BOTH PARTIES MUST BOTH GAIN BENEFITS!


In that same WIN-WIN vein, you are perfectly entitled to follow the example of Oliver Twist and ask for more. You are being asked to make an investment in money, time and effort to help your customer. Are you getting as much business from your customer as you could? On a number of occasions I have seen the Sales Director of a supplier use the “request” for electronic trading as a very sound reason to visit the customer and literally “ask for more”. In one instance a customer of mine, a supplier of specialist tools and devices to the construction industry, went to her customer and said something along the lines of, “We would be happy to do as you ask, but currently you only give us about ten per cent of your business. You give ninety per cent to our competitor! Give us fifty per cent and we will do all you ask and do it immediately!”


She won the extra business, increasing her company's sales to that customer by 400 per cent!


In summary so far then:


You must be informed of exactly what is required, IN FULL. It can be too late to get a decent working relationship if you fail to cultivate your senior contacts in your customer and just become part of a target list drawn up by the customer's eBusiness team or their vendor. You and your customer must get worthwhile benefits out of the eBusiness relationship. Get these things right with your customer and you have both made a good start towards successful and beneficial electronic trading.


You may even find an early opportunity to multiply your sales to this customer!


In a later blog we will consider the second GOLDEN RULE for successful integrated EDI.

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