In September 2001, we at IBG rolled out an online ordering option for office product customers. That month, we generated $200 a day in sales through our web site. Today, we average more than $4,000 a day. In addition, IBG is using Quantum Net software from Reno, Nev.-based Forms Management Data Systems Inc. Combined, we channel more than 50 orders a day from our customer service department to process more than 20 client-owned releases to our web site.
At $4,000 a day, more than 40 percent of IBG's general office supplies business is processed with practically no human intervention. Our online Office Product Solution site is connected directly to our main operating system. The moment a customer hits "SUBMIT ORDER," a picking ticket for the order prints in our warehouse. Items we don't stock are added automatically on our daily purchase order to our wholesaler. Our wholesaler communicates electronically to IBG to advise us about items shipping. Billing occurs automatically, 24 hours after the order.
When IBG examined online office product platforms, we knew it was critical that our site offer clients more than the ability to "catalog shop" online. The system we chose and implemented allows IBG to create customized requisitions built around the needs of individual clients. More importantly, the system offers tangible value that helps our clients drive down costs. We built an extensive database of "best-value items." When a client logs on to our site and orders a product, the system automatically shows alternative items that serve the same purpose but can save the customer between 20 percent and 75 percent.
The point of this column is not to marvel at the high-tech route IBG has taken. I am years too late for a "technology is wonderful" revelation. Most of us have realized that technology is a must for making ourselves more valuable to clients. The point of this column is to consider the byproduct of our increased technology--"excess" human resources.
With our increased attention on automation, we could choose to pare down our customer service staff. But we've taken a slightly different view of this "excess." IBG's 5-person customer service staff has more than 120 years of combined experience in the office product business. That's a lot of knowledge. By shifting our transactional processing to computers, we free up the staff to take phone calls from customers needing advice. This is advantageous: When competing against the "big guys" in office products, the most common complaint we hear about "Brand X Depot" is that clients have trouble reaching humans who know what they're talking about.
IBG also acknowledges that transaction processing is the least effective labor expense a company can have. With some basic retraining, we're working toward turning those transaction, or reactive, employees into proactive sales associates. We're examining ways to analyze our clients' minute ordering details. And once one of our proactive customer service employees recognizes a trend that might mean trouble, he or she calls the client, uncovers problems and implements a solution. How much more valuable is a workforce structured to solve customer problems than one that's organized to take orders?
That is the true value of technology.
Gail O'Roke, CDC, is CEO of distributorship Independent Business Group, based in Hayward, Calif., and president of DMIA.
