I have a friend and occasional wise sage of business who says we provide Customer Service that is too good. This got me to thinking, is it possible to provide customer service that is too good?? Can it be that by constantly trying to go "above and beyond" for our customers we are not helping them to help themselves??
I know that for me personally I value customer service very highly. I am one of those people that will not tip if the service in a restaurant has not been as I believe it should be. I get infuriated when left hanging by some outsourced call centre, whatever the location, or I get to talk to some disembodied voice that I can tell does not give a damn about my account. And I get even more annoyed if I think we have let a customer down. But is this going too far?
In our job we get the "privilege" of working with some of the largest names in IT and IT consultancy and it always astounds us that the level of service they provide to their customers is sometimes shockingly bad. But by dint of the fact that they are a "Big Name" they get away with it. Don't get me wrong, we make mistakes occasionally as we are human, but we always have an in depth enquiry afterwards to try to ensure it does not happen again. But these larger organisations don't seem to have the same fear of poor customer service that we do. I can tell you absolute horror stories of call centres and voice-mail systems.
If their server goes down they get round to fixing it, in time. They then tell everybody else to rush to resend the messages they didn't receive or lost. The other day I was called to a meeting by a customer. The meeting was to explain what we were doing about all the server outages that we have experienced in the last two weeks, not our outages but the big expensive consultancy firms outages. This big consultancy firm was offering no explanation or apology, just a warning that our customers messages were delayed and they should stop this happening. But it was the big consultancy firms servers that were the problem!!! They should know how to stop the problem, fix your damn servers. But we are the ones being asked what we are doing to stop the outages. Go figure.
But I still think that you cannot provide customer service that is too good. Yes I try to ensure we over specify servers and back-ups and comms. But I still fret that we have not got enough, that we might let a customer down. We try to ensure we won't, put systems in to try to prevent it, but I still worry.
And I am glad I do, and we do as a company, because I would like to think that if I was a customer I would be happy to, metaphorically, pay that 20% gratuity for good service. Because I would like to think that our customers are treated as I would like to be treated. It cannot be wrong to strive to be the best, to try to do the best for someone paying you to do a job.
Showing posts with label service. Show all posts
Showing posts with label service. Show all posts
Wednesday, March 26, 2008
Thursday, February 28, 2008
The way to profit in EIPP is Systems and Quality
I was reading the postings of another blogger the other day, regarding EIPP. Quick note; For most people EIPP is a re-branding of the most basic of EDI, the supplier sends an invoice. We're great in IT at making up new acronyms or names for old processes in the hope of selling more.
Anyway back to the subject of the post. The blogger in question was bemoaning the fact that whilst there is a lot of interest and "new" players in EIPP, few if any make a profit. One company in question has a turnover of £3.5 Million but loses approximately £7 million per annum. Its P&L account reserve is -£27 million. Another has turnover of £1 Million and loses of £3 million, P&L reserve of -£23 million.
Now here I show my limited knowledge of the practice of Venture Capital and high finance. Both these organisations are backed by VC's and so they are NOT insolvent. But... when are the investors going to get their money back? Or to put it more accurately when are the VC's going to get a return on their investment of other peoples money? I make it that break even is 200% of current turnover, assuming costs do not rise with increased turnover. To get the £27 million pounds back at current growth rate you are looking at a minimum of 10 years. Given that the turnover of the smaller company above went down slightly last year it and that costs increased ahead of turnover at the larger company it could take longer. This is almost "Dot Com" optimism.
So much for high finance.
I think there is a different approach that can lead to a profitably growing company. It may grow slower but note the word profit. That way is to concentrate of quality and systems. Quality because that leads to better systems requiring less resource to manage the processes. Quality because it leads to fewer remedial actions, which always cost more. Get it right first time and it's always cheaper. Quality because any business must concentrate of delighting it's customers. Delighted customers lead to higher retention rates and easier new business sales because of customer referral. My other point is systems. Quality systems. If you can systematise a process rather than having to add more support staff for each new customer then you gain a much bigger return on the investment and, sorry to say, but the fewer humans involved in a process the lower the error rate so the higher quality.
The only downside to the quality and systems approach is that you cannot make a quick "land grab" for a market. But it a lot less stressful for you and your trading partners.
Here's an interesting question for you. If a new customer came to you and asked for 30 days credit, with their company finances in the state described above, would you extend them credit? If not then why would you put important business relationships between you and your business partners in their hands.
Far better to put it in the hands of a company making a profit and dedicated to a quality implementation. Preferably one with a recognised accreditation for quality. Business relationships are hard won and even something as seemingly simple as sending invoices to your customers or receiving invoices from your suppliers deservers to be handled in a quality manor that does not put the relationship at risk.
Anyway back to the subject of the post. The blogger in question was bemoaning the fact that whilst there is a lot of interest and "new" players in EIPP, few if any make a profit. One company in question has a turnover of £3.5 Million but loses approximately £7 million per annum. Its P&L account reserve is -£27 million. Another has turnover of £1 Million and loses of £3 million, P&L reserve of -£23 million.
Now here I show my limited knowledge of the practice of Venture Capital and high finance. Both these organisations are backed by VC's and so they are NOT insolvent. But... when are the investors going to get their money back? Or to put it more accurately when are the VC's going to get a return on their investment of other peoples money? I make it that break even is 200% of current turnover, assuming costs do not rise with increased turnover. To get the £27 million pounds back at current growth rate you are looking at a minimum of 10 years. Given that the turnover of the smaller company above went down slightly last year it and that costs increased ahead of turnover at the larger company it could take longer. This is almost "Dot Com" optimism.
So much for high finance.
I think there is a different approach that can lead to a profitably growing company. It may grow slower but note the word profit. That way is to concentrate of quality and systems. Quality because that leads to better systems requiring less resource to manage the processes. Quality because it leads to fewer remedial actions, which always cost more. Get it right first time and it's always cheaper. Quality because any business must concentrate of delighting it's customers. Delighted customers lead to higher retention rates and easier new business sales because of customer referral. My other point is systems. Quality systems. If you can systematise a process rather than having to add more support staff for each new customer then you gain a much bigger return on the investment and, sorry to say, but the fewer humans involved in a process the lower the error rate so the higher quality.
The only downside to the quality and systems approach is that you cannot make a quick "land grab" for a market. But it a lot less stressful for you and your trading partners.
Here's an interesting question for you. If a new customer came to you and asked for 30 days credit, with their company finances in the state described above, would you extend them credit? If not then why would you put important business relationships between you and your business partners in their hands.
Far better to put it in the hands of a company making a profit and dedicated to a quality implementation. Preferably one with a recognised accreditation for quality. Business relationships are hard won and even something as seemingly simple as sending invoices to your customers or receiving invoices from your suppliers deservers to be handled in a quality manor that does not put the relationship at risk.
Saturday, February 02, 2008
ISO 9001 can improve your business profitability
We have recently been going through the process of achieving ISO 9000 accreditation for our Software as a Service EDI/EIPP offering. It has been a fascinating process. I had always believed that one of the secrets of a successful outsourcing or SaaS offering is to reduce the number of support calls to a minimum. I know this is a statement of the blindingly obvious but you would be amazed the tales we hear from customers moving to our service from other offerings.
When we started out on the route to ISO 9001 accreditation I thought it would have some benefit in terms of seeing where we were making mistakes, correcting them and of course there is the marketing benefit, but mainly in making sure that we continued to provide a quality service for our customers. I believe we are the only SaaS EDI or EIPP provider to be accredited for ISO 9001.
But the more I, with the help of our ISO 9001 consultant, got in to the depths of understanding ISO 9001 it became clear that whilst ISO 9001 does highlight the quality of whatever systems are being measured, the major benefit is the application of the continuous improvement principle.
We have been accredited for our data mapping processes and our systems and support processes for the provision of EDI data mapping, translation and transportation. In my next blog I will discuss the application of process to data mapping and translation, but today I want to concentrate on support.
When I look at a lot of our competitors, especially in the SaaS EDI or EIPP space, I notice that whilst the are bigger than us in terms of turnover, they are typically making huge losses. Some have accumulated losses of over 26 million and yet they still have turnover that is substantially less than their costs.
Looking at it even closer you can see that whilst they increase turnover they are increasing staff, and staff costs, much faster. To me this leads to the conclusion that whatever systems and support they have are not efficient enough. And that is one of the major benefits of the ISO9001 process.
What we have found is that every time we have have a support call/system issue the ISO process of continuous improvement has helped us to eradicate that error/issue for the future. It does not mean that we never get errors but analysis shows use that over 85% of all support calls/issue we received are outside of our service. They are either errors with the data sent to us or the comms of the sender or the recipient.
By concentrating on the ISO 9001 continuous improvement process we are able to keep our support costs to a minimum, we are able to handle millions of transactions per annum with a much smaller team than any of our competitors and we are able to keep improving the experience for our customers and their trading partners.
ISO 9001 does not make you infallible, but it helps you to learn from each mistake and improve your business and profitability.
I did have a cheeky thought though, should I go to the bigger players making all the losses and offer that we do the product, service and support for them, there will of course be an element of cost for them ;-). We could then show them how to make money instead of burning it. Just a thought....
When we started out on the route to ISO 9001 accreditation I thought it would have some benefit in terms of seeing where we were making mistakes, correcting them and of course there is the marketing benefit, but mainly in making sure that we continued to provide a quality service for our customers. I believe we are the only SaaS EDI or EIPP provider to be accredited for ISO 9001.
But the more I, with the help of our ISO 9001 consultant, got in to the depths of understanding ISO 9001 it became clear that whilst ISO 9001 does highlight the quality of whatever systems are being measured, the major benefit is the application of the continuous improvement principle.
We have been accredited for our data mapping processes and our systems and support processes for the provision of EDI data mapping, translation and transportation. In my next blog I will discuss the application of process to data mapping and translation, but today I want to concentrate on support.
When I look at a lot of our competitors, especially in the SaaS EDI or EIPP space, I notice that whilst the are bigger than us in terms of turnover, they are typically making huge losses. Some have accumulated losses of over 26 million and yet they still have turnover that is substantially less than their costs.
Looking at it even closer you can see that whilst they increase turnover they are increasing staff, and staff costs, much faster. To me this leads to the conclusion that whatever systems and support they have are not efficient enough. And that is one of the major benefits of the ISO9001 process.
What we have found is that every time we have have a support call/system issue the ISO process of continuous improvement has helped us to eradicate that error/issue for the future. It does not mean that we never get errors but analysis shows use that over 85% of all support calls/issue we received are outside of our service. They are either errors with the data sent to us or the comms of the sender or the recipient.
By concentrating on the ISO 9001 continuous improvement process we are able to keep our support costs to a minimum, we are able to handle millions of transactions per annum with a much smaller team than any of our competitors and we are able to keep improving the experience for our customers and their trading partners.
ISO 9001 does not make you infallible, but it helps you to learn from each mistake and improve your business and profitability.
I did have a cheeky thought though, should I go to the bigger players making all the losses and offer that we do the product, service and support for them, there will of course be an element of cost for them ;-). We could then show them how to make money instead of burning it. Just a thought....
Tuesday, January 22, 2008
SaaS adds more value to EDI
With more and more off our customers we are happily finding ways to add value to the normal EDI processing that has been experienced with older, on-site solutions.
Firstly new acronyms are appearing, for example EIPP (Electronic Invoice Presentation and Payment). Sceptics might call this EDI invoices and BACS. I shall explore the differences in a future post.
For a lot of our users, up until about 18 months ago, traditional EDI with a hint of XML for spice, was just fine. But we have started to notice a sea change in the requirements for EDI. Obviously there is the move towards AS2 and other methods of sending and receiving data. We have been using AS2 for our customers for nearly 4 years but in the past 18 months the adoption rate has accelerated markedly. This is a great move, it reduces the costs of EDI and adds value by removing the latency built in to most EDI processes by the nature of the timed connections.
We have also seen a move to increased data requirements. This has proved difficult for some users as it was not always easy, as I am sure you will realise, to modify their ERP system to process the additional data. However they often had the additional data in "Non EDI" data, for example catalogues, or even the incoming documents such as Purchase Orders.
Because of the nature of our SaaS solution, being based around the concept that all data has value whatever the format, plus the fact that the solution is based on a repository we have been able to take these disparate data sources and merge them to create enhanced EDI messages that the recipient requires. This would be a real struggle with traditional on-site systems.
Over the next few months we intend to expand the use of such solutions to both enhance customer data, add functionality to the user experience of the service and to provide translations of product codes, units of measure, delivery points and many other requirements that are becoming the norm for the modern EDI message exchange.
By adding more value to EDI messages we believe that adoption will accelerate through the next 10 years.
Firstly new acronyms are appearing, for example EIPP (Electronic Invoice Presentation and Payment). Sceptics might call this EDI invoices and BACS. I shall explore the differences in a future post.
For a lot of our users, up until about 18 months ago, traditional EDI with a hint of XML for spice, was just fine. But we have started to notice a sea change in the requirements for EDI. Obviously there is the move towards AS2 and other methods of sending and receiving data. We have been using AS2 for our customers for nearly 4 years but in the past 18 months the adoption rate has accelerated markedly. This is a great move, it reduces the costs of EDI and adds value by removing the latency built in to most EDI processes by the nature of the timed connections.
We have also seen a move to increased data requirements. This has proved difficult for some users as it was not always easy, as I am sure you will realise, to modify their ERP system to process the additional data. However they often had the additional data in "Non EDI" data, for example catalogues, or even the incoming documents such as Purchase Orders.
Because of the nature of our SaaS solution, being based around the concept that all data has value whatever the format, plus the fact that the solution is based on a repository we have been able to take these disparate data sources and merge them to create enhanced EDI messages that the recipient requires. This would be a real struggle with traditional on-site systems.
Over the next few months we intend to expand the use of such solutions to both enhance customer data, add functionality to the user experience of the service and to provide translations of product codes, units of measure, delivery points and many other requirements that are becoming the norm for the modern EDI message exchange.
By adding more value to EDI messages we believe that adoption will accelerate through the next 10 years.
Friday, January 11, 2008
EDI as a Supplier: Brownie Points or Valuable Benefits?
A simple sum, taking the numbers of keystrokes saved through integrated EDI and multiplying them by the keystroke cost quickly determines the viability of each electronic trading relationship.
This has proven to be very useful. It makes assessing whether eBusiness is actually saving the company any money as well as showing up any benefits and what those benefits are worth.
All well and good for a giant, but how is a smaller company able to know things are moving in the right direction, if there are simply insufficient resources to measure these things for you?
What are the opportunities for improvements if you are a supplier to a customer requiring EDI?
Here are a few:
Integrated EDI improves the certainty of delivery for your invoices. You can avoid the “Haven’t received the invoice. Send a copy!” conversation when you enquire what the Devil has happened to your money!
It also improves the timing of invoice delivery, which is very helpful as:
(i) closer invoice timing to goods delivery improves the likelihood of trouble free delivery (GRN) approval
(ii) the earlier invoices are produced & delivered the earlier the “payment due date” clock starts ticking
You are doing the invoice input for the customer, which leads to better information quality going into your customer’s ERP and ensures 100% data integrity across the supply chain!
Your integrated EDI will reduce the likelihood of delayed payments because errors are flagged up earlier, on processing the invoice, rather than as a result of chasing non-payment. A faulty invoice sent via EDI is rejected by the system and you can know in seconds. A faulty paper invoice might remain undetected by you until well after the end of your agreed payment terms with the customer!
You may not have the resources for obtaining detailed measurements of the effect of EDI on your business but you can still determine if things are going in the right direction for you. All you need do is watch one or more of some easily ascertained Key Performance Indicators (KPIs)…
- Improved Process Effectiveness – watch to see if the numbers of Day Sales Outstanding are reducing.
- Improved Productivity – is the number of invoices (or detail lines) processed per fiscal period increasing?
- More Automation – is the proportion of transactions that are processed automatically increasing?
- Improved Quality 1 – check that the ratio of credit notes raised to invoices produced is decreasing!
- Improved Quality 2 – is the number of rejected invoices decreasing?
- Improved Quality 3 – is the number of queries raised also decreasing?
- Cost – is the average cost of processing a transaction decreasing?
So, even with limited time and resources available to you, a glance at any one of these can reassure you that you, as well as your customers, can benefit from integrated electronic trading.
Next time we can look at the same subject from the customer's perspective
Wednesday, January 09, 2008
A Simple Guide To Electronic Data Interchange
Over the holiday period I decided to create a "Simple" Guide to EDI for our Web Site. The idea was that, without needing to register or download, people could visit the Web Site and get a "Simple" FREE introduction to EDI, an answer to the question "What is EDI?".
I wanted to highlight to people what EDI is, what standards they can expect to find and how messages are exchanged. Six Web pages later and I have a thought. The concept of exchanging business documents electronically IS Simple.
The detail of it is convoluted, but for a good reason. Most businesses have a unique way of working. Most IT systems have a unique way of working. Certainly each industry has unique features, for example the way Paper is specified in an order is nothing like how a tin of baked beans is specified which is nothing like how a length of steel lintel for a building is specified. If a human is handling orders and invoices then their knowledge is used to "translate" between the buyers instructions and the suppliers computer system. With EDI or EIPP then the software must assume some or all of this intelligence.
The concept of EDI is easy, but as Ken Foster (One of Our Data Mappers) who has sat on many EDI committees and standards bodies says "The devil is in the detail". If people say that EDI is easy, then they are ignoring the detail or spinning a line (probably in sales ;-)). We chose to do this work because we a sad people who enjoy the detail, but it is not the standard IT software role and it is not to everyone's liking. We believe, and our customers believe, that Outsourcing EDI (SaaS) is best for most businesses because it is such a specialist area. Have a look at any "simple" Guide to EDI and if it is telling the truth you will see how complex it can be.
I wanted to highlight to people what EDI is, what standards they can expect to find and how messages are exchanged. Six Web pages later and I have a thought. The concept of exchanging business documents electronically IS Simple.
The detail of it is convoluted, but for a good reason. Most businesses have a unique way of working. Most IT systems have a unique way of working. Certainly each industry has unique features, for example the way Paper is specified in an order is nothing like how a tin of baked beans is specified which is nothing like how a length of steel lintel for a building is specified. If a human is handling orders and invoices then their knowledge is used to "translate" between the buyers instructions and the suppliers computer system. With EDI or EIPP then the software must assume some or all of this intelligence.
The concept of EDI is easy, but as Ken Foster (One of Our Data Mappers) who has sat on many EDI committees and standards bodies says "The devil is in the detail". If people say that EDI is easy, then they are ignoring the detail or spinning a line (probably in sales ;-)). We chose to do this work because we a sad people who enjoy the detail, but it is not the standard IT software role and it is not to everyone's liking. We believe, and our customers believe, that Outsourcing EDI (SaaS) is best for most businesses because it is such a specialist area. Have a look at any "simple" Guide to EDI and if it is telling the truth you will see how complex it can be.
Sunday, December 30, 2007
The World (retail at least) Keeps Spinning
Firstly, complements of the season to all.
As with all companies in the business of EDI, at least some of our customers have continued to operate throughout the holiday season. In particular in the retail sector orders for goods to be delivered on all days are being processed, and at least one of the logistics companies that use our service were actually working from 6pm on 25th December.
Of course our servers operate on a 365 days per year basis, but certain customers require the comfort of a support contact available as well, which we provide. This is seen very much as an insurance policy and we hope it never needs to be called upon. Unfortunately this year, on 26th December it was. Not a problem with any of our servers, but because we monitor customers traffic we were able to alert a particular customer to the fact that their systems had failed and they had not sent some of the transmissions we had expected. Sometimes, because EDI is integral to a business, we can actually help users to see errors in other systems, before any other alert is raised, and it is great to be able to offer such help.
One other issue that has come to our attention is the practice of some other providers in charging for messages stored on their servers. A number of new customers this year have contacted us concerned about storage charges over the festivities. It appears that some of our competitors charge for holding messages that the customer does not download within 7 days. Whilst this does not effect users such as those detailed above, this would obviously cause extra cost for users if they are shutdown over the festive period. What an outdated practice. One would almost think that this was the equivalent of an EDI "Stealth Tax". We were able to put users minds at rest as we do not charge for storage of up to one year. Some of our users are saying this will save them several hundred pounds which is great. We want our users to be happy customers for years to come and being short sited for a few hundred pounds would be ridiculous. It would also appear to be at odds with our views that EDI should be Software as a Service and AS2 must be Free of Charge.
One day all EDI will be this way.
As with all companies in the business of EDI, at least some of our customers have continued to operate throughout the holiday season. In particular in the retail sector orders for goods to be delivered on all days are being processed, and at least one of the logistics companies that use our service were actually working from 6pm on 25th December.
Of course our servers operate on a 365 days per year basis, but certain customers require the comfort of a support contact available as well, which we provide. This is seen very much as an insurance policy and we hope it never needs to be called upon. Unfortunately this year, on 26th December it was. Not a problem with any of our servers, but because we monitor customers traffic we were able to alert a particular customer to the fact that their systems had failed and they had not sent some of the transmissions we had expected. Sometimes, because EDI is integral to a business, we can actually help users to see errors in other systems, before any other alert is raised, and it is great to be able to offer such help.
One other issue that has come to our attention is the practice of some other providers in charging for messages stored on their servers. A number of new customers this year have contacted us concerned about storage charges over the festivities. It appears that some of our competitors charge for holding messages that the customer does not download within 7 days. Whilst this does not effect users such as those detailed above, this would obviously cause extra cost for users if they are shutdown over the festive period. What an outdated practice. One would almost think that this was the equivalent of an EDI "Stealth Tax". We were able to put users minds at rest as we do not charge for storage of up to one year. Some of our users are saying this will save them several hundred pounds which is great. We want our users to be happy customers for years to come and being short sited for a few hundred pounds would be ridiculous. It would also appear to be at odds with our views that EDI should be Software as a Service and AS2 must be Free of Charge.
One day all EDI will be this way.
Monday, October 29, 2007
Beware the "cheap" option!
A natural tendency, when asked by a customer to trade via EDI, is to put off the dreaded day for as long as possible. It is apparent that cost is involved. Who is to say that the customer will stick with you after you have spent the money to implement EDI? No wonder folks do their best to avoid it all and no wonder customers find it takes much longer than was hoped for to persuade the suppliers to trade electronically.
Your staff are expected to type it all again into your systems or copy type it 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!
In truth that second bullet point is as deadly to your customer as it is to you. It leads to increased costs for your customer every time they get into the paper chases and escalations that always result during any remedial activities.
What to do?
Well don’t run a mile when you get asked to trade via EDI. Get the EDI integrated with your system so it runs automatically. Use a service that shines forth with efficiency and prompt attention for your customer. Stand out from the crowd and you will have a good chance of avoiding a dictated “solution” that may save you the price of a proper EDI implementation but will cost you much more in extra work and inevitable human error.
Subscribe to:
Posts (Atom)
